The government has notified a 33 per cent hike in natural gas prices, which have led to steep increase in CNG rates in states like Maharashtra and Gujarat.
The Ministry of Petroleum and Natural Gas on Friday issued a notification for implementation of a new pricing guidelines for all domestically produced natural gas effective from November 1.
"The gas price, determined, under these guidelines would be applicable to all gas produced from nomination fields given to ONGC and Oil India, New Exploration and Licensing Policy (NELP) blocks, such pre-NELP blocks where, the Production Sharing Contract (PSC) provides for government approval of gas prices and coal-bed methane (CBM) block," the notification said.
In a separate order, the ministry's pricing arm said: "The price of domestic natural gas for the period November 1, 2014 to March 31, 2015 is given hereunder: USD 5.05 per million British thermal unit on Gross Calorific Value (GCV) basis."
This price translates into a price of USD 5.61 per mmBtu on Net Calorific Value (NCV) basis, the same basis on which the previous rate of USD 4.2 per mmBtu was decided.
The heat generated by burning of fuel is measured in calorific value basis.
The price hike led to steep increase in compressed natural gas (CNG) rates in Maharashtra and Gujarat.
Mahanagar Gas Ltd, which retails CNG and piped cooking gas in Mumbai, hiked CNG prices by Rs 4.50 per kg to Rs 43.45. Similarly, it also raised tariff for piped natural gas (PNG) supplied to households for cooking purposes by Rs 2.49 to Rs 26.58 per cubic meters.
In Ahmedabad, state government-owned GSPC Gas, Adani Gas and Sabarmati Gas hiked CNG prices by up to Rs 4 per kg to Rs 48.50 per kg, Rs 48.20 a kg and Rs 48.09 per kg respectively.
Gujarat Gas hiked prices by Rs 1.80 per kg to Rs 48.50.
Adani Gas is also planning to raise rates by Rs 3 per kg for CNG it retails in Faridabad, a city that borders national capital.
However, Indraprastha Gas Ltd, the sole retailer of CNG and PNG in the national capital, decided not to raise rates despite input cost going up.
"In spite of revision in domestic gas prices announced by the government with effect from November 1, 2014, IGL has decided not to revise the retail price of CNG and domestic PNG in the interest of its consumers in Delhi, Noida, Greater Noida and Ghaziabad," said IGL Managing Director Narendra Kumar.
Industry sources said, IGL, which is a private firm controlled by state-owned GAIL and BPCL and Delhi government, is likely to hold rates till BJP is able to cobble a government in the national capital or till fresh assembly elections are held.
IGL is likely to incur about Rs 100 crore loss for holding prices, they said.
