Mahanagar Gas Mulls Price Hike For Piped Natural Gas

The proposed hike in the piped gas prices will be in consonance with the 30 per cent increase in the LPG prices by the government. Even after the intended price hike is effected, piped gas, currently being supplied by Mahanagar Gas to parts of Mumbai, will work out at ten per cent cheaper than the subsidised LPG prices.

When contacted Ajit M Nimbalkar, managing director of Mahanagar Gas Ltd, confirmed that the company is mulling over a price hike. However, as per the marketing strategy, the company has no plans to offer natural gas at a price higher than the 14.2 kg LPG cylinder.

For its domestic customers, Mahanagar Gas is offering the piped gas at Rs 4.95 per cubic meter whilst industrial and commercial customers are charged Rs 9.33 per cubic meter. Considering the conversion ratio of 18 cubic meter of natural gas equivalent to 14.2 kg of LPG, the cost of natural gas works out to Rs 90 as against Rs 120 for an LPG cylinder.

Mahanagar Gas with a Rs 130 crore equity base is setting up a network of pipelines in Central Mumbai from City Gate in Chembur in north eastern Mumbai. The company till date has provided natural gas on tap to over 700 customers in Chembur as an alternate to liquefied petroleum gas.

The company also plans to provide gas to 20 commercial customers whose applications were under scrutiny.

Nimbalkar pointed out that a senior official from British Gas was busy working on the conversion technology for commercial customers.

Meanwhile, the company is promoting the natural gas to replace electric power to run air conditioning in restaurants, hotels and industrial houses.

For its new office premise at Bandra-Kurla complex, Mahanagar Gas with the Pune-based Thermax Ltd plans to install air conditioning (AC) unit. The 35 tonne AC unit is expected to run on natural gas thereby bringing down the operating cost of the unit, Nimbalkar added.