CNG prices to be cut by Rs 15, piped cooking gas by Rs 5

NEW DELHI: CNG prices will be cut by a steep Rs 15 per kg and piped cooking gas by Rs 5 after the government rejigged domestic gas supplies to raise allocations to fuel retailers in major Indian cities such as Delhi and Ahmedabad.

Prices of CNG, or compressed natural gas, in the national capital of Delhi had been hiked by Rs 4.50 last month to Rs 50.10 a kg after retailers such as Indraprastha Gas Ltd (IGL) were forced to buy a fifth of their gas (LNG) requirements from overseas.

The price increase led to protests from the newly elected Aam Aadmi Party-led government in Delhi as well as autorickshaw operators, who had called a maha-panchayat this week to decide on a possible strike.

Indian Oil Minister M Veerappa Moily said the government has now decided to meet all the requirements of CNG and piped cooking gas retailers in the country from domestic fields, sparing them the need to buy costlier LNG (liquefied natural gas).

With all the input fuel available at USD 4.2 per million British thermal units as against imported Liquefied Natural Gas (LNG), which is three times costlier, “the price of CNG in Delhi would be reduced by about Rs 15 per kg (about 30 per cent). There will also be a reduction of about Rs 5 per cubic meter (about 20 per cent) in the price of PNG,” Moily said.

Supplies to CNG retailers have been increased by cutting about 1.9 million standard cubic meters per day or one-third of the domestic gas allocated to non-core users in the steel, oil refineries and petrochemical sectors.

CNG retailers, or city gas distributors, will get 8.32 mmscmd of gas from fields given to ONGC and Oil India, as compared to 6.4 mmscmd presently.

Oil Secretary Vivek Rae said while the orders to increase domestic gas supply to CNG entities were issued today, the decision will take two-three days to take effect as gas firms tie-up and sign new supply agreements.

There will be no cut in rates in western Indian city Mumbai, which gets all its gas requirements from domestic fields. However, in Delhi, which presently uses as much as 28 per cent of the costlier, imported LNG, and cities in western Indian state of Gujarat such as Ahmedabad, which too were heavily reliant on imported fuel, will see a price cut. -PTI