Kejriwal can't gas around this one

A company which arrived into the itinerary of Delhi’s new chief minister, Arvind Kejriwal, on his first day in office was Indraprastha Gas Ltd (IGL). The reason was a prior announcement by the central government of a rise in prices of compressed natural gas (CNG) by 10 per cent.

The city’s auto-rickshaw drivers have already begun their protests, staging a demonstration on Sunday in front of the petroleum minister’s house.  

The new CM had a meeting with IGL Managing Director Narendra Kumar on Saturday, immediately after taking office.

“We had a meeting with the CM and the new transport minister.  He enquired about the reasons,” said a senior company official.

With no value added tax for CNG in Delhi, ministry sources said, the usual hope that state taxes could be cut wasn’t an option. Since January, the state has seen a 26 per cent rise in CNG prices.

One way out before the city’s new Aam Aadmi  Party government is to seek a higher quota of domestic natural gas for Delhi. “We have increased the quota for city gas distribution entities by increasing the supply from 5.75 million tonnes to 6.47 mt, by cutting supply to non-priority sectors like steel and refineries. This was to ensure uniformity in supply of domestic gas after a court order,” a petroleum ministry official added. In other words, raising the quota now is unlikely.

The ministry had directed state-run GAIL to re-allocate supply to CNG and piped natural gas to bring about uniformity in prices across the country. This led to increase in prices in Delhi and Mumbai. The new consumer price of CNG in Delhi is Rs 50.10 a kg, compared to Rs 45.6 a kg in September, Rs 41.19 a kg in June and Rs 39.9 a kg in January.

The new consumer price of PNG to households in Delhi was also revised from Rs 27.5 a standard cubic metre (scm) scm to Rs 29.50 a scm up to consumption of 30 scm in two months, with effect from Friday. Beyond 30 scm in two months, the applicable rate in Delhi would be Rs 52 a scm. Delhi government has 5% stake in the company, while Bharat Petroleum Corp and Gail has 22.5% each.

Meanwhile, auto drivers held a protest outside petroleum minister M Veerappa Moily’s house on Sunday seeking a rollback on CNG prices.