12-18% fall in CNG prices in Gujarat likely

The issue of cheaper gas supply– at a price supplied to Delhi and Mumbai – is now almost settled. Within a few days, the supply will start flowing to city gas distribution (CGD) companies and then to customers. However, the amount of reduction in prices is still tentative. According to industry sources, price of compressed natural gas (CNG for auto) is  expected to come down to Rs56-60 per kilogram from the present Rs68.80 in Ahmedabad. Prices of piped natural gas (PNG) used by households will fall to Rs30 from Rs37 per standard cubic meter (SCM). 

“For domestic users prices are likely to fall by 19% and for auto sector the fall is likely to be between 12 and 18%. The precise fall is still not clear as the quantity of administered price mechanism (APM) gas and Panna-Mukta and Tapti fields (PMT) gas is yet not decided,” a top official from a CGD said.

“If the supply of PMT is higher, then the consumer price will also increase as APM gas is cheaper while the PMT is costlier,” the official said.

“If gas supply from PMT is increased then prices will be higher by Rs2 for both – CNG and PNG in the Gujarat market. The consumers should also note that prices of Adani Gas and GSPC will also be different because of transportation cost and other statutory structure,” the official added. In normal circumstances, GSPC gas is cheaper by Rs1.50 to 2 per kg.

After the central government issued guidelines for uniform supply of natural gas to all CGDs in the country, on November 14, GAIL, the supplier of APM gas allotted a specific quantity of gas to be supplied to Gujarat State Petroleum Co (GSPC). However, between November 29 and December 7, GAIL increased the allocation from PMT fields (in other words costlier gas) by 28%. The percentage of gas allocation to the state will have a direct bearing on the prices.

However, quantity of gas to be supplied under PMT is still a bone of contention.