GSPC reduces CNG, PNG prices, Adani to follow soon

Reduction in prices as soon as supply from GAIL begins from Dahej

In a move that would benefit over 235,000 vehicle users and more than 1.23 million households of the state, Gujarat State Petroleum Corporation Ltd (GSPC) today announce that it would be reducing gas prices for vehicular (CNG) and domestic (PNG) use as soon as supply from Gas Authority of India (GAIL) begins from Dahej point. Another big player in city gas distribution Adani Gas, of the Adani Group, is likely to follow the suit.

This move by the state PSU comes after the Gujarat High Court verdict directing Central government to supply gas to Gujarat at the same price as Delhi and Mumbai, and subsequent agreement between Gas Authority of India (GAIL) and GSPC to supply cheaper gas from the Dahej supply point.

GSPC today announced that it will reduce CNG prices for vehicular use to Rs  56.20 per kg from current Rs  66.30 per kg. For the domestic piped natural gas (PNG) users the reduction in prices will be between Rs  2 to Rs  9.45 per standard cubic meter (SCM).

Source in Adani Gas confirmed that they were also contemplating reduction in CNG and PNG prices on the same line as GSPC. They said that calculations are being done based on supply of gas from GAIL under administered price mechanism (APM), as per Court orders.

Last year the Gujarat High Court had passed the directions on a public interest litigation (PIL) filed by one Dhrangadhra Prakrutik Mandal which had alleged discrimination against Gujarat in allocation of natural gas at APM in comparison with metropolis like Delhi and Mumbai. This order was upheld by the Supreme Court in September this year. Following this the union ministry of petroleum and natural gas issued guidelines for GAIL to supply natural gas to entire country under a uniform policy and with out discrimination.

Speaking on the development Gujarat minister for energy and petrochemicals Saurabh Patel said, "Following the direction of the Supreme Court and the Gujarat High Court, GAIL has agreed to supply cheaper gas to Gujarat. As soon as the inflow of cheaper gas beings from GAIL, state PSU GSPC will reduce CNG (vehicular use) prices by Rs  10.10/kg and PNG (domestic) by Rs  2-9.45/scm."

Patel further said that the gas price could go down further by nearly Rs  3 if GAIL did not charge Rs  42.46 per MMBTU as connectivity charges. He further claimed that had the gas been supplied to Gujarat soon after High Court's judgement in July last year it would have saved Rs  600 crore of state gas consumers.