CNG price raised by up to Rs 1.9/kg in Delhi

CNG price in the national capital and adjoining towns has been increased by up to Rs 1.90 per kg, as costlier LNG was being imported to make up for fall in output from Reliance Industries gas field.

Compressed natural gas in Delhi will cost Rs 1.70 per kg more at Rs 35.45 per kg with effect from midnight tonight, Indraprastha Gas Ltd, the sole retailer of CNG and piped natural gas in national capital, said here today.

IGL hiked price of CNG sold to automobiles in Noida, Greater Noida and Ghaziabad by Rs 1.90 per kg to Rs 39.80 per kg.

This is the sixth increase in CNG rates this year. IGL had last raised CNG prices in Delhi by Rs 1.75 per kg to Rs 33.75 per kg from December 31.

The hike had been necessitated because IGL is buying more of imported liquefied natural gas (LNG) after supplies from RIL's KG-D6 gas fields dried up. Imported fuel costs at least three times more than USD 4.20 per million British thermal unit rate fixed for domestic gas.

City gas distributors like IGL are not getting any supplies from KG-D6 since September last year, after a 40% output drop forced the government to cut supplies to non-priority sectors so that requirement of power and fertiliser plants can be fully met.

Explaining the compulsions leading to the revision in the price of CNG, IGL Managing Director M Ravindran said, "We are constrained to revise the retail price of CNG due to increase in the overall input cost of natural gas being sourced by us as a result of increased dependence on imported spot R-LNG."

He added that the proportion of costly imported LNG vis-a-vis domestic gas in the overall pool of natural gas being procured for supply as CNG has risen to around 25%.

With the demand for CNG increasing rapidly in the region, "IGL is left with no other alternative but to source costly LNG (from the spot market) at well over three times the cost of domestic gas," he said.

Ravindran said the increase would have minor impact on the per km running cost of vehicles. "For autos, the increase would be 5 paisa per km, for taxi it would be 9 paisa per km and in case of buses, the increase would be 48 paisa per km, which translates to less than one paisa per passenger - km."