Natural gas redistribution leads to price revision in cities

With government redistributing domestic natural among city gas entities, CNG prices have been hiked not just in Delhi but also in Lucknow and Kanpur while the rates have been sharply cut in Ahmedabad and Surat.
Following a Gujarat High Court order, the government ordered all of domestically available natural gas for city gas projects to be equitably distributed among all the companies in the country than convert the fuel into compressed natural gas (CNG) for sale to automobiles.
Prior to this cheaper domestic gas was largely available to firms retailing CNG in Delhi and Mumbai.
This has led to cut in domestic gas supplies to entities in Delhi and Uttar Pradesh. On the other hand, firms in Gujarat, which were previously dependent totally on costlier imported gas, have got cheaper gas resulting in cut in rates.

Official sources said following the implementation of the gas order, CNG price in Delhi has been hiked by Rs 4.50 per kg to Rs 50.10 per kg while in Lucknow it has gone up by Rs 14.81 to Rs 67.81 a kg. In Kanpur, rates have been increased by Rs 16 to Rs 68 per kg.
But in Ahmedabad, prices have come down by Rs 10.05 per kg to Rs 58.75 a kg while in Surat they were reduced by Rs 10.10 to Rs 56.20 per kg.

Keeping in view the limited domestic availability, the government ordered that about 80 per cent of the requirement of CNG retailers be met from cheaper domestic gas and the rest be imported.

For IGL, which is the sole retailer of CNG in national capital, the order would not have made a big difference as domestic gas made up for 77-80 per cent of its requirement. But for Mahanagar Gas Ltd, which solely relies on domestic gas for CNG retailing in Mumbai, the cut would have meant a Rs 16 per kg increase in CNG price in the city because of costlier imported LNG coming in to replace the cut in allocation.
With such a steep hike in price on horizon, Mumbai's auto rickshaw owners association approached Maharashtra High Court and got a stay on implementation of the order in the state, sources added.