CNG prices to be hiked by Rs1.75/kg in Delhi

The price of compressed natural gas (CNG) has been hiked by Rs1.75 per kg in the national capital with effect from midnight tonight, mainly on account of rupee depreciation against the US dollar.

Indraprastha Gas Ltd, which sells CNG to automobiles and piped cooking gas to households in Delhi and neighbouring towns, said the new prices would be effective from midnight tonight.

"The revision in prices would result in increase of Rs1.75 per kg in the consumer price of CNG in Delhi and Rs2.00 per kg in the consumer price of CNG in Noida, Greater NOIDA and Ghaziabad," the company said in a press statement here.

The new consumer price in Delhi will be Rs33.75 per kg, while it will be Rs37.90 per kg in Noida, Greater NOIDA and Ghaziabad.

This is the fifth increase in CNG rates this year. IGL had last raised CNG prices in Delhi by Rs2 per kg to Rs32 per kg from October 1.

IGL Managing Director M Ravindran said: "We have been forced to increase the retail price of CNG due to a major increase in the input cost of entire pool of natural gas being sourced by us as a result of recent appreciation of the dollar vis-à-vis the rupee and the increased dependence on imported LNG."

The hike was necessitated because IGL bought expensive imported LNG to make up for the stoppage of supplies from Reliance Industries' eastern offshore KG-D6 gas field because of a fall in output.

In addition, rupee depreciation has made the raw material -- that is, natural gas -- even costlier. The rupee was hovering around Rs 49.50 per US dollar at the time of the last price hike, while today, it is about Rs53 to a US dollar.

IGL contracted 0.308 million standard cubic metres per day of gas from RIL, but following a 35 per cent drop in KG-D6 output, supply to city gas projects has been cut so that demand of the priority power and fertiliser sectors can be met.

IGL gets up to 2.7 mmscmd of gas from domestic fields of Oil and Natural Gas Corp (ONGC), called APM gas, and buys another 0.6 mmscmd of LNG.

Ravindran said, "With the allotted APM gas having already been fully utilised and complete stoppage of KG-D6 supplies due to a decrease in production, IGL is left with no other alternative but to source costly spot LNG to meet the ever-increasing demand, which has contributed to the higher cost of sourcing the gas."

The base price of natural gas procured by IGL from all its sources, ie APM, KG-D6, long-term R-LNG, as well as spot R-LNG, is in dollars per mmbtu and the dollar has appreciated by 14 per cent vis-à-vis the rupee since the last price revision of CNG.

Ravindran said the increase would have a minor impact on the per kilometre running cost of vehicles. "For autos, the increase would be 5 paise per km, for taxis it would be 8 paise per km and in the case of buses, the increase would be 50 paise per km, which translates to less than one paisa per passenger-km," he said.