Pocket pinch: Delhi, satellite towns to pay more for fuel

Indraprastha Gas Limited (IGL), a joint venture of GAIL (India) Ltd, BPCL and the government, announced a revision in the selling prices of compressed natural gas (CNG) and piped natural gas (PNG) in the national capital region  of Delhi, Noida, Greater Noida and Ghaziabad.

The price hike would result in an increase  of Rs 2 per kg in the consumer price of CNG in Delhi and Rs 2.25 per kg in the consumer price of CNG in Noida, Greater Noida and Ghaziabad. The new consumer price of Rs. 41.90 per kg in Delhi and Rs 47.35 per kg in Noida, Greater Noida and Ghaziabad would come into effect from Monday midnight.

The new consumer price of PNG to households in Delhi is also being revised from Rs 23.50 per scm to Rs 24.50 per scm up to consumption of 30 scm in two months with effect from Tuesday. Beyond consumption of 30 scm in two months, the applicable rate in Delhi would be Rs 40.50 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 26 per scm up to consumption of 30 scm in two months, which has been increased from existing Rs 25 per scm. Beyond consumption of 30 scm in two months, the rate applicable in these cities would be Rs 43 per scm.  

Explaining the compulsions leading to the revision in the prices, the IGL official spokesperson said, ‘The recent steep appreciation of the dollar vis-a-vis the rupee, as well as the increased dependence on imported R-LNG has resulted in major increase in our input cost of gas, which has necessitated the increase in retail prices of CNG and PNG’.

There has been a sharp depreciation of the rupee vis-a-vis the dollar in the last one month. The base price of natural gas being procured by IGL from all its sources, APM, long term R-LNG as well as spot R-LNG is dollar-linked, thereby making the entire input price totally dependent on price of dollar vis-à-vis rupee.

In addition, the proportion of costly imported R-LNG vis-a-vis domestic gas in the overall pool of natural gas being procured for supply, as CNG as well as domestic PNG, has been constantly on the rise.

Since allotted APM gas has already been fully utilised by IGL and there has been a complete halt to KG D-6 supplies to IGL since 2011, any additional demand has to be met through costly R-LNG, which is available in the market at well over three times the cost of domestic gas supplies under APM.
However, this increase would have minor impact on the per km running cost of vehicles. For autos, the increase would be 6 paisa per km, for taxi it would be 10 paisa per km and in case of buses, the increase would be 57 paisa per km, which translates to around one paisa per passenger-km.