Govt diverts gas from industries to city gas to moderate CNG, piped cooking gas rates

The government on Wednesday diverted some natural gas from industries to city gas operators in a bid to check spiralling CNG and piped cooking gas prices.

The oil ministry in a notification issued on Wednesday amended an earlier order to increase allocation of domestically produced gas to city gas operators.

The allocation for city gas operators like Indraprastha Gas Ltd in Delhi and Mahanagar Gas Ltd of Mumbai has been increased from 17.5 million standard cubic meters per day to 20.78 mmscmd, officials said.

The increased allocation will meet 94 per cent of the demand for CNG supplies to automobiles and piped cooking gas to households in the country.

Previously, about 83 per cent of the demand was met and the remaining was met through import of LNG by GAIL.

City gas operators complained against the mechanism as it meant using high priced imported LNG, which led to frequent CNG and piped natural gas price hikes, they said.

Under the previous dispensation, GAIL would average out price of domestically available gas with the LNG and supply fuel at a pooled priced. This price for current month came to USD 10.58 per million British thermal units.

After the amendment, the gas price will come down to USD 7.5, they said.

GAIL will make increased allocation to the city gas operators by cutting supplies from LPG and petrochemical plants.