Gujarat government-owned gas distribution player, GSPC Gas Company and the Adani Group's gas distribution arm, Adani Gas have announced sharp increase in gas prices for the domestic, industrial and CNG consumers. The price hike was attributed to the costly imported LNG and non-supply of cheaper domestic gas to Gujarat by Centre.
GSPC hiked the CNG and PNG prices in the range of 10 per cent to 34 per cent in all the segments, while Adani hiked prices of domestic PNG by over 26 per cent and CNG by over 13 per cent.
"In spite of several representations made by the State Government and repeated requests by GSPC Gas Company Ltd, there has been no allocation of any cheaper domestic gas by the Central Government. GSPC Gas Company has, therefore, been constrained to depend entirely on imported natural gas," a GSPC Gas statement said.
|WHAT TRIGGERED IT
- Increase in spot LNG prices internationally
- Rupee depreciation against US Dollar
- Centre has failed to supply APM gas to Ahmedabad as had been directed by the Gujarat High Court
- Adani Gas has to depend on expensive R-LNG supplies from Petronet LNG Ltd, which imports gas
- Frequent revision in price by Petronet LNG
"The situation has been further compounded, of late, with increase in spot LNG prices internationally and the value of the Indian Rupee depreciating against the US Dollar. Due to the above factors, GSPC Gas Company has been forced to revise the prices," it said.
"The price rise is due to the upward revision in imported LNG Price compounded by adverse Foreign Exchange Rates. The price of imported gas has risen by over 30% since April 2012, when last price revision was effected, about eight months ago," Adani Gas said in a statement.
CNG retail price at Adani Gas will Rs .60.15 per kg, up from Rs 53 earlier. The domestic users of Adani Gas will feel the heat of the gas price hike as prices are hiked by over 26 per cent at Rs 31 per standard cubic meter (scm) from Rs 24.50 per scm.
|Prices (in Rs)
|CNG price Rs/kg; PNG price Rs/standard cubic meter (SCM)
"The High Court of Gujarat vide its judgment dated July, 25, 2012 has directed the Central government to provide 'Domestic Administered Price Mechanism (APM)' gas to Ahmedabad. Once this judgment is implemented, and APM gas is supplied to Ahmedabad, CNG price can be reduced by 30 per cent," said an Adani statement.
"However, Central Government till date has not implemented the same. Consequently, Adani Gas has to depend on expensive R-LNG supplies from Petronet LNG Ltd, which imports gas, to fulfill the growing demand by the CNG users," the Adani statement said.
Adani Gas supplies gas to over 172,000 domestic, 700 industrial and 1250 commercial customers in Ahmedabad. It also supplies CNG to about 200,000 vehicles across Ahmedabad and Vadodara.
For the domestic PNG consumers of GSPC Gas the price increase is Rs 3.32 per scm or 18 per cent to Rs 21.50 per scm.
The PNG prices for industrial users has been hiked from Rs 29.20 per scm to Rs 32.10 per standard cubic meter (scm) (without taxes). While price rise for non-commercial PNG users is 34.6 per cent from Rs 20.90 per scm to Rs 28.00 per scm.
GSPC has revised CNG prices upwards to Rs 56.90 per kilogram (kg) (including taxes and duties) from Rs 50.20 per kg, showing an increase of 13.3 per cent. GSPC Gas supplies 4.2 million metric standard cubic meters per day (mmscmd) of natural gas in Gujarat. This includes PNG to over 395,656 domestic users, 1,746 industrial units and to over 1,532 commercial and non-commercial premises including hotels, restaurants, and temples across the state.
The revised rates for both the companies will be made effective from January 16, 2013.
However, Gujarat Gas Company Ltd (GGCL), a leading gas player in south Gujarat has not yet decided on the price hike. "There is no decision on price hike as of now," said a GGCL source.
GSPC Gas Company sources gas mainly through the Petronet LNG Ltd, a company promoted by the Central Government, which delivers imported natural gas with a price formula that entails a price increase every month, the statement said.