Adani cuts gas price by Rs10/kg while IGL justifies price hike

A day after Indraprastha Gas Ltd hiked prices of compressed natural gas sold to automobiles and piped natural gas supplied to domestic consumers by Rs4.50 per kg and Rs5.15 per kg, respectively, in Delhi, private sector gas distributor Adani Gas today announced a Rs8-10 per kg reduction in the prices of both CNG and PNG it supplies in Ahmedabad and Vadodara.

State-run GSPC had, last week, reduced the prices of natural gas supplied to consumers in Gujarat.

Adani's prices for CNG and PNG (excluding VAT) have now come down to Rs58.75 per kg and Rs28.80 per standard cubic metre, respectively.

Indraprastha Gas today said the increase in rate by a steep Rs4.50 per kg was forced on it by court orders that led to cut in allocation of cheaper domestic natural gas.

IGL said 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.

The sharp reduction in prices is a result of the recent Supreme Court ruling to allot cheaper natural gas to Gujarat. GAIL (India) Ltd and GSPC Gas Company struck a deal for cheap gas, which resulted in lower prices.

Adani Power and GSPC have been depending on costlier imported R-LNG for distribution to their customers.

''With allocation of domestic gas though limited, it would help in stabilising prices and bring much needed comfort to customers. This reduction is also expected to increase penetration of CNG in these cities thereby helping improve the air quality,'' Adani Gas said in a statement.

Following a Gujarat High Court order, the government had 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.

In view of the shortage in gas supplies, the government reduced the quota of domestically produced natural gas to CNG retailers to 80 per cent of their requirement and directed that the remaining be imported.

IGL, which is the sole retailer of CNG in the national capital, currently meets 77-80 per cent of its gas requirements from domestic supplies and the reduction in quota would not have made much of a difference.

IGL's APM gas allocation, which makes up for 72 per cent of its requirements, was reduced from 23,42,000 cubic meters per day to 22,28,000 cubic meters a day.

However, for Mahanagar Gas Ltd, which is solely dependent on domestic gas for CNG retailing in Mumbai, the cut would mean a Rs16 per kg increase in CNG price in the city as the company would have to fall back on costlier imported LNG to bridge the supply gap.

In Mumbai, meanwhile, the association of autorickshaw owners has obtained a stay order from the High Court on the implementation of the order, which would steeply raise gas prices in the city.