After diesel, LPG, consumers to shell out more for CNG

State-owned GSPC Gas, Adani hike prices in the wake of rising cost of imported LNG.

After diesel and LPG woes, its the compressed natural gas (CNG) that will burn a hole in the pockets of gas users in Gujarat.

GSPC Gas a subsidiary of the state-owned Gujarat State Petroleum Corporation (GSPC) has today increased the prices of CNG by over 8 per cent or Rs 3.25 per kg to Rs 40.25 per kg. The hike came into effect from Monday onwards. The move is expected to adversely affect automobile users in the state. GSPC is the main supplier of CNG to the city gas distribution (CGD) players in Gujarat including Adani Gas, Charotar Gas Sahakari Mandali, Sabarmati Gas and GSPC Gas.

"The hike was necessitated due to high prices of imported Liquified Natural Gas (LNG). The LNG prices are linked to the crude price fluctuation and the calculation for price determination made it imperative to hike the gas prices for the retail users so as to maintain the economic viability," informed a source associated with the gas distribution business.

While the state-run gas company has hiked the CNG prices by Rs 3.25 per kg, the private sector CNG player, Adani Gas has increased the prices by Rs 2.50 per kg from Rs 38 to Rs 40.50 per kg now. Earlier in May this year, GSPC had raised prices of CNG from Rs 34.45 per kg to Rs 37 per kg.

During past one year, CNG prices in Gujarat have increased by over 35 per cent. "Since January this year, the imported LNG prices have been going up. So far, we have been hiking the prices by Rs 0.50 at times, but now considering high fluctuations in crude prices and LNG prices thereby, we had to pass the burden to the consumers," informed a top official at Adani Gas.

However, Gujarat Gas, a private sector gas distributor, has refrained from hiking the gas prices.

"We have not hiked the gas prices at present," told a company official.GSPC Gas has 110 CNG stations, while Adani Gas has 54 CNG stations. The two companies sell around 500,000 kg of CNG on daily basis, while the state's total CNG consumption stands at around 700,000-800,000 kg. The industry insiders maintained that the dependence on imported LNG mainly because the state was not getting cheaper gas from domestic sources like KG-D6 basin on the east coast of the country.