Indraprastha Gas likely to hike CNG prices by Rs 8/kg this yr

New Delhi, Jan 13 (PTI) Close on the heels of 4.5 percent hike in CNG prices, Indraprastha Gas Ltd may raise therates by another Rs 8 per kg this year, as the company isforced to buy expensive imported liquefied natural gas (LNG)in the absence of allocation from domestic fields.

IGL had this month raised compressed natural gas (CNG)prices in the national capital by Rs 1.25 per kilogram to Rs29 per kg and piped cooking gas to Rs 26 per cubic meter, asit bought more of imported LNG to meet the rising demand.

The CNG demand in Delhi is growing in double-digits andIGL is expanding in adjoining cities like Ghaziabad for whichthe government has not allocated any gas source, sources privyto the development said.

IGL has exhausted all of the 2 million cubic meters perday (mmscmd) of natural gas allocated for Delhi from state-rundomestic fields while Reliance Industries'' has curtailedsupplies to 0.15 mmscmd against an allocation of 0.308 mmscmd.

Sources said the twin factors have forced IGL to buyimported liquefied natural gas (LNG) which costs USD 8-10 permillion British thermal unit as against USD 4.2 per mmBtuprice, at which gas from state-run fields and that fromReliance is available.

In case there is no additional allocation of gas fromdomestic fields and Reliance does not restore supplies to theoriginal contracted volumes, IGL may be forced to raise CNGprices.

The hike could be by Rs 1 per kg in the second quarter of2011 calendar year, by another Rs 2.75 per kg in July-September period and by a further Rs 4 per kg in three monthsending December 31.

In the national capital region, IGL has an allocation of2 mmscmd from state fields for Delhi, 0.2 mmscmd for GreaterNoida and 0.5 mmscmd for Faridabad and Gurgaon.

There is no such allocation for Ghaziabad, where IGL israpidly setting up CNG dispensing stations and piped gasnetwork.

Sources said IGL has asked the government to mergetogether its state gas allocation of 2 mmscmd for Delhi, 0.2mmscmd for Gautam Budh Nagar and 0.5 mmscmd for Faridabad andGurgaon as an overall allocation of 2.7 mmscmd for Delhi,Noida, Greater Noida, Ghaziabad, Faridabad and Gurgaon.

The merging of allocation is important because IGL isdeveloping city gas in the national capital region as oneuniform entity.

IGL, sources said, has also sought an allocation of stategas for distribution in Ghaziabad.

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