CNG prices to rise by Rs 2 per kg this week
Indraprastha Gas Ltd is expected to hike the price of CNG by Rs 2 per kg over the weekend to pass on the impact of a stronger dollar.
By Sanjay Dutta, TNN | Updated:
NEW DELHI: Indraprastha Gas Ltd is expected to hike the price of CNG (compressed natural gas) by Rs 2 per kg over the weekend to pass on the impact of a stronger dollar, costlier electricity and sale of higher quantities of imported gas that is three times more expensive than the government's allocation of fuel from domestic fields.
The increase will be 20-30 paise more in Ghaziabad, Noida and Greater Noida due to a different tax structure.
This will be the fourth CNG price revision this year in Delhi and is sure to set off a clamour for an increase in fares from taxi, auto and bus operators. IGL had earlier raised CNG price by Rs 1.25 per kg on January 1, 50 paise on June 4 and 30 paise on August 15.
Industry sources said even after the increase in the price, CNG will be cheaper by a third than petrol and about 22% than diesel. The impact, in terms of running cost per km, will be 5-6 paise for autos and 10-11 paise for taxis and cars. It will be negligible in terms of per passenger cost of a bus.
CNG prices are bound to rise further, at least by Re 1 per kg, in every remaining quarter, as TOI had first reported in August 2010. This is essentially because IGL will have to buy more and more of the imported gas to meet shortfall in supplies from the Andhra offshore fields of Reliance Industries Ltd.
Besides, the rise in the dollar's exchange rate to Rs 48 over the last fortnight or so, the 22% increase in electricity tariffs too have contributed much to the rising cost of IGL's operations. Since the price of gas, be it domestic or imported, is denominated in the Greenback, every dollar rise in the exchange rate pushes up CNG cost by 50 paise per kg. The recent electricity tariff hike too has made an impact of 19-20 paise per kg.
But the biggest bugbear for IGL is, ironically, the rising demand for the ecologically benign fuel. The quantity given to it at government-controlled price of $4.2 per unit is just not enough to meet the demand surge. To bridge the shortfall, it has to buy gas imported in ships from global spot markets. This gas costs almost $17 per unit at IGL's facilities.
This will be the fourth CNG price revision this year. CNG price was raised by Rs 1.25 per kg on January 1, 50 paise on June 4 and 30 paise on August 15.
The increase will be 20-30 paise more in Ghaziabad, Noida and Greater Noida due to a different tax structure.
This will be the fourth CNG price revision this year in Delhi and is sure to set off a clamour for an increase in fares from taxi, auto and bus operators. IGL had earlier raised CNG price by Rs 1.25 per kg on January 1, 50 paise on June 4 and 30 paise on August 15.
Industry sources said even after the increase in the price, CNG will be cheaper by a third than petrol and about 22% than diesel. The impact, in terms of running cost per km, will be 5-6 paise for autos and 10-11 paise for taxis and cars. It will be negligible in terms of per passenger cost of a bus.
CNG prices are bound to rise further, at least by Re 1 per kg, in every remaining quarter, as TOI had first reported in August 2010. This is essentially because IGL will have to buy more and more of the imported gas to meet shortfall in supplies from the Andhra offshore fields of Reliance Industries Ltd.
Besides, the rise in the dollar's exchange rate to Rs 48 over the last fortnight or so, the 22% increase in electricity tariffs too have contributed much to the rising cost of IGL's operations. Since the price of gas, be it domestic or imported, is denominated in the Greenback, every dollar rise in the exchange rate pushes up CNG cost by 50 paise per kg. The recent electricity tariff hike too has made an impact of 19-20 paise per kg.
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But the biggest bugbear for IGL is, ironically, the rising demand for the ecologically benign fuel. The quantity given to it at government-controlled price of $4.2 per unit is just not enough to meet the demand surge. To bridge the shortfall, it has to buy gas imported in ships from global spot markets. This gas costs almost $17 per unit at IGL's facilities.
This will be the fourth CNG price revision this year. CNG price was raised by Rs 1.25 per kg on January 1, 50 paise on June 4 and 30 paise on August 15.
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