After the CNG prices were cut earlier this month, Oil Minister M Veerappa Moily has ordered city gas distribution (CGD) firms to display break-up of fuel price to consumers, which would include cost of gas to the CGD entity, supply and distribution cost, company's margin, excise, VAT and any other tax - to their customers.
This move which would ensure the benefit of cheaper domestic gas passed onto the end users and would also lead to transparency in pricing. The Oil Minister has also asked all CGD companies to furnish the break-up of CNG and PNG price to the Ministry on annual basis by April 30 each year, which includes the data for 2013-14 to be furnished by April 30, 2014, non-compliance to which lead to cancellation of domestic gas allocation for CNG and PNG.
Compressed natural gas or (CNG) sold to automobiles and natural gas piped to household kitchens, will be the first fuel where consumer will get invoices providing break-up of price. Notably up-till now, no break-up of price of petrol, diesel, LPG or kerosene has ever been provided to consumers.
Earlier in February, the oil ministry decided to give city gas distribution (CGD) companies’ cheaper domestic gas to meet all their requirements for CNG and piped natural gas (PNG) supplies to households compared with the previous limit of 80% for most states. This development led to a steep Rs 14.90 per kg cut in price of compressed natural gas or CNG and Rs 5 per kg reduction in rates of cooking gas piped into kitchens in Delhi. Similar cuts in rates were expected in all states, except Maharashtra and Haryana, as city gas distributors stop buying higher-priced LNG and shifted entirely to domestic gas.