IGL may hike CNG price this week

After petrol, prices of compressed natural gas (CNG) sold to automobiles in the national capital are likely to be hiked by a steep Rs 2 per kg this week.

Indraprastha Gas (IGL), the sole supplier of CNG to automobiles and piped cooking gas to households in the national capital region (NCR), may announce a hike in CNG price over the weekend, sources privy to the development said.

The hike is being necessitated because IGL is being forced to buy expensive imported LNG due to drop in supplies from Reliance Industries eastern offshore KG-D6 gas field, they said.

CNG is now priced at Rs 30.00 per kg in Delhi and Rs 33.60 per kg in Noida, Greater Noida and Ghaziabad. After the price increase, CNG in Delhi will cost Rs 32 per kg and Rs 35.90 per kg in Noida, Greater Noida and Ghaziabad.

Oil companies had earlier this month hiked petrol price by Rs 3.14 per litre.

IGL had contracted 0.308 million standard cubic metres per day (mmscmd) of gas from Reliance at $4.205 per million British thermal unit (mmBtu), but following drop in KG-D6 output supplies have dropped to just 0.1 mmscmd. This has forced the company to buy more of imported liquefied natural gas (LNG) that is priced at over $17 per mmBtu.

The company is buying some 0.3 mmscmd of imported LNG.

Despite the increase, CNG will continue to be about 66% cheaper than petrol in terms of per kilometre running cost of vehicles. When compared to diesel-driven vehicles, the economics are also in favour of CNG, as the differential at the revised price would be about 27%.