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The Times of India
The Times of India
Business
Sanjay Dutta | TNN

IGL says CNG prices to stay high, may revise rates monthly

NEW DELHI: Compressed natural gas (CNG) consumers in Delhi-NCR (national capital region) are unlikely to get any respite anytime soon as Indraprastha Gas Ltd (IGL) may have to revise rates every month as a result of a new gas allocation guideline, even as the company is looking at reducing cost of operation to soften the blow for consumers.

“CNG prices are based on several factors. One of them is the cost of market-priced gas and LNG (gas imported in ships), which accounted for 20% of IGL’s CNG and PNG (piped natural gas) sales in 2021-22. These rates are expected to remain high for the time being because of the situation in Europe (Russia-Ukraine conflict). That will have an impact on CNG rates,” IGL managing director Sanjay Kumar said on Friday.

LNG prices are still hovering around $20 per unit, which is double the normal rate. Prices will rise further if summer is unusually warm in the Western Hemisphere. Domestic gas prices too are expected to rise further in October.

As the share of LNG and market-priced domestic gas rises in IGL’s portfolio due to limited availability of government-controlled gas, it impacts retail prices, he said. “Every dollar increase in natural gas price has an impact of Rs 4-4.50 on retail rates,” he said.

He said under the gas allocation guideline, state-run GAIL will set a price for supplying gas every month after pooling government-controlled domestic gas, market-priced output from domestic fields and LNG. “We will now have a running account with GAIL and may have to adjust prices twice a month as per our cost,” he said.

“We are tightening our belts and looking at reducing costs to cope with the situation,” he said, indicating that raising prices is not the first option always.

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