Impact will be marginal, claims IGL - Times of India

NEW DELHI: Indraprastha Gas Ltd, the city's sole supplier of gas as automotive and kitchen fuel, on Saturday raised retail prices by Rs 1.25 per kg of CNG (compressed natural gas) and Rs 2.10 per unit of PNG (piped natural gas). With this hike, the public transport fares in Delhi and its satellite townships are expected to go up .

But IGL managing director Rajesh Vedvyas said the increase in CNG price is about 4.5% and its impact will be ''marginal''. For autos, the cost will rise by 3 paise per km, for private cars/taxis it would be 6 paise per km and in the case of buses, the impact would be 35 paise per km.

Vedvyas reasoned that IGL had to raise prices since the quantity given to it at government-controlled prices was not enough to meet rising demand and it was buying gas imported in ships, which is costlier, to meet the shortfall. IGL has exhausted its quota of government-regulated gas and allocation from Reliance Industries' Andhra offshore fields, and sourcing costlier LNG (liquefied natural gas).

Vedvyas said despite the price increase, CNG would still offer over 62% savings towards the running cost when compared to petrol-driven vehicles at present prices. When compared to diesel-driven vehicles, the economics in favour of CNG at revised prices would be over 23%.

After the latest revision, CNG will cost Rs 29 per kg and PNG Rs 18.95 per unit (cubic metre) in Delhi. In case of piped gas to kitchens, the rate in Delhi would be Rs 26 per unit for the first 90 units consumed in a period of four months.

CNG in Noida, Greater Noida and Ghaziabad, which have higher local sales tax rates, will be priced at Rs 32.50 per kg.

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Source: "Natural Gas Prices" via Glen in Google Reader