IGL hikes CNG price in capital from July 06 midnight

Unable to bear the rising cost due rupee depreciation and increased dependence on imported LNG, capital’s sole retailer of Compressed Natural Gas (CNG) and piped natural gas - Indraprastha Gas has hiked the prices by 2.90 per kg with effect from midnight of July 06, 2012. This is the third hike in 2012 in Delhi and its adjoining areas and as a result CNG will cost Rs 38.35.

Previously there was a price increase of Rs 1.75 per kg on January 01, 2012 which was again hiked by Rs 1.90 per kg two months later on March 06, 2012. According to IGL, who supply gas to automobiles in Noida, Greater Noida and Ghaziabad, increase in price by Rs 3.30 per kg to Rs 43.10 was necessary due to depreciation in value of rupee and rising cost of imported gas.

As IGL was fully dependent on foreign liquefied natural gas (LNG) due to stoppage of supply of gas from Reliance Industries KG-D6 gas fields, it had no other option but to increase the price as the cost of imported fuel is nearly three times high at $4.20 per million British thermal unit rate fixed for domestic gas. As the local distributers are not getting any supplies from KG D6 due to drying of gas field since September last year which resulted in a 40% output drop and has compelled the government to reduce supplies to non-priority sectors so as to fulfill the requirement of power and fertilizers plants.

Scarcity of domestic natural gas has compelled IGL to announce a hike in price of CNG due to rise in input cost of entire pool of natural gas which has increased considerably since the last price revision as a result of depreciation of rupee against the dollar with the latter rising up to 14 %. Adding to the woes the price hike is fuelled by a 23% rise in electricity tariff with a minimum wages announced by the government.

IGL said for autos, the increase would be 8 paisa per km, for taxi it would be 14 paisa per km and in case of buses, the increase would be 83 paisa per km, which translates to less than two paisa per passenger km.