CNG in Delhi to cost Rs2 more from midnight tonight

Close on the heels of a sharp increase in petrol prices, Compressed Natural Gas (CNG) rates were hiked by a steep Rs2 per kg on Friday, mainly on account of a fall in the rupee value against the US dollar, pushing up the cost of inputs.

Indraprastha Gas Ltd (IGL), the sole supplier of CNG to automobiles and piped cooking gas to households in the national capital region, said CNG will cost Rs32 per kg in Delhi from midnight tonight, as against Rs30/kg at present.

Similarly, in neighbouring Noida, Greater Noida and Ghaziabad, CNG will cost Rs2.30 per kg more -- at Rs35.90/kg -- from midnight tonight, the company said in a press statement here.

This is the fifth increase in CNG prices this year and follows the Rs3.14 per litre hike in petrol prices effected by fuel retail firms from September 16.

The hike was necessitated because IGL is being forced to buy expensive imported LNG due to a drop in supplies from Reliance Industries' eastern offshore KG-D6 gas field.

Also, the rupee depreciation has made raw material -- that is, natural gas from Reliance, state-owned GAIL and imported LNG -- even costlier.

The government has fixed the price of domestic gas produced by state-owned ONGC and Reliance in US dollar terms and everytime the rupee depreciates against the US currency, users end up paying more. Gas from both Reliance and ONGC is priced at USD 4.20 per million British thermal units.

On top of the basic gas price, state gas utility GAIL charges a marketing margin in US dollars for the effort involved in selling the gas produced by ONGC. GAIL charges a marketing margin of USD 0.11 per mmBtu, while Reliance also charges a USD 0.135 per mmBtu marketing margin.