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Indraprastha Gas Ltd (IGL) on Thursday announced an increase of Rs 4.50 per kg in the consumer price of compressed natural gas (CNG) in Delhi and Rs 5.15 per kg in the consumer price of CNG in Noida, Greater Noida and Ghaziabad.
The company, a joint venture between GAIL (India) Ltd, BPCL and Delhi government, owed the fresh hike in CNG and piped natural gas (PNG) to rise in input cost as a result of reallocation of domestically produced gas quantities by the government for all city gas distribution companies across the country. The new consumer price, Rs 50.10 per kg in Delhi and Rs 56.70 per kg in Noida, Greater Noida and Ghaziabad would be effective from Friday.
The new consumer price of PNG to the households in Delhi is also being revised from Rs 27.50 per scm to Rs. 29.50 per scm up to consumption of 30 scm in two months with effect from Friday. Beyond consumption of 30 scm in two months, the applicable rate in Delhi would be Rs 52 per scm.
Due to differential tax structure in the state of Uttar Pradesh, the applicable price of domestic PNG to households in Noida, Greater Noida and Ghaziabad would be Rs 31 per standard cubic metre (scm) up to consumption of 30 scm in two months, which has been increased from existing Rs 29 per scm. Beyond consumption of 30 scm in two months, the rate applicable in these cities would be Rs 54 per scm.
Explaining the compulsions leading to the revision in the prices, the official spokesperson of IGL said, “There has been a reduction in allocation of APM gas to us, which is forcing us to source more quantity of market priced imported R-LNG, whose prices are currently on an upswing. This has affected our overall input cost by over 13%”. In addition, there has also been an increase in the operating expenses including increase in minimum wages announced by the government with effect from October 2013.
Centre had undertaken a reallocation of domestic gas allocations to all CGD companies across the country as a fall out of a recent court order. All the earlier gas allocations had been cancelled and the revised allocations now also include PMT gas, which is priced higher than APM gas.
In terms of volume, there has been nearly 5% decrease in the overall quantity of domestic gas allocated to IGL for Delhi, Noida, Greater Noida and Ghaziabad.
The reduction in allocation as well as increase in demand is forcing IGL to source much higher priced imported R-LNG. The prices of R-LNG have been on the rise recently and therefore, new R-LNG quantities are available in the market at much higher prices than the existing ones.
