Indraprastha Gas (IGL) is unlikely to prune prices for automobile fuel compressed natural gas (CNG) any time soon, even as the government earlier in the month raised allocation of domestically-produced natural gas to city gas distribution (CGD) entities, aimed at reducing their input costs with the hope that they would pass on the benefit on to consumers.
“IGL has always taken a long-term view with regard to prices. When the input gas prices were hiked every month, we took a conscious decision that we will not increase the prices to maintain sustainability of CNG business. Our last CNG price hike was in May 2022 and our CNG price in Delhi still remains lowest in the country. Therefore, we are not mulling at any price revision as of now,” Pawan Kumar, director (commercial), IGL, told FE.
IGL’s retail sales price for CNG now stands at Rs 75.61/kg in the National Capital Territory, lower than MGL’s Rs 80/kg price in Mumbai, and Rs 83.9 a kg of Adani Total in Ahmedabad.
IGL’s retail price for household PNG, at Rs 50.59 per standard cubic metre (scm), however, is higher than MGL’s Rs 48.5/scm in Mumbai and its adjoining areas. IGL last revised the price of domestic PNG on August 5; MGL reduced the price for both CNG and PNG with effect from August 17. Adani Total reduced CNG prices by up to Rs 4.7/kg and by up to Rs 3.2 per scm for domestic PNG with effect from August 17.MGL and Adani Total’s decision to reduce prices comes following the government’s August 10 decision to allocate a higher share of domestically produced gas to CGD firms, in view of rising gas prices internationally. For the current quarter, CGD firms will get 94% of their requirement compared with 85% in the first quarter from domestic sources; they have been asked to procure the remaining from the open market.
While announcing its decision through a notification, the government had said that the increased allocation of gas to the CGD sector “is expected to reduce the input costs of the CGD entities. The entities are, in turn, expected to pass on the benefit to the consumers”.
On August 13, minister for petroleum & natural gas Hardeep Singh Puri tweeted, “Reform in APM gas allocation to CGD sector will reduce the cost of the Gas to CGD entities by 2$-2.5$ per MMBTU, decrease dependency on costlier imported gas and reduce CNG & PNG prices in the country.”