Gujarat welcomes Supreme Court directive to centre for allocation of cheaper gas

NEW DELHI: Gujarat's energy minister Saurabh Dalal stated that Supreme Court's directive to Central government for allocation of cheaper natural gas to Gujarat will benefit lakhs of compressed natural gas (CNG) consumers in the state. His statement came after the apex court gave its order in response to a public interest litigation filed by a Gujarat based non government organisation.

A media statement by the information department of the government of Gujarat said apex court has clearly directed the central government to allocate natural gas under the formula of administered price mechanism to Ahmedabad, Gujarat like other states.

Natural gas allocation has been bone of contention between the BJP government of Gujarat and centre's UPA government for last about five years. The centre has been arguing that Gujarat has been allocated adequate natural gas, which it is diverting to the industrial users. Also, central government is critical of Gujarat for levying highest 15% value added tax on natural gas trade in the country. Gujarat has been suffering due to fall in natural gas production from RIL's D6 block on East Coast. Gujarat accounts for one third India's natural gas consumption.

Expensive imported natural gas coupled with higher VAT has made Gujarat's natural gas market most expensive in the country. Gujarat is the only state where CNG is sold for about Rs 65 per kg as compared to about Rs 50 in Mumbai and Delhi markets.

Dalal called Supreme Court directive as Gujarat's victory against centre's bias against the state in gas allocation policy. He hoped that the centre will act as per the Supreme Court's order promptly. ""Gujarat's 2.35 lakh vehicle owners using CNG will benefit in the times of inflation if the centre act immediately as per the court order. The apex court's directive has also showcased that centre government is unfriendly towards Gujarat in natural gas allocation. The development has revealed the lies of centre,"" said Dalal who has been vocally criticising the centre for inadequate natural gas allocation to the state.