Mumbai: The petroleum ministry has formed a committee to resolve the ongoing tussle between Mahanagar Gas (MGL), the sole supplier of gas in Mumbai, and several consumer associations on the issue of gas prices.

Union Petroleum Minister Ram Naik has informed the consumer associations that the government will review the overall natural gas and compressed gas supply scenario in Mumbai. He has appointed a high level committee under the chairmanship of Vijay Raghavan, joint secretary (gas), ministry of petroleum, to study the issues related to MGL's differential price structure.

The government has asked the committee to submit its recommendations regarding the prices for compressed natural gas (CNG) for all sectors, particularly for industry and domestic consumers, within 15 days, says Naik.

''Following this, MGL will set up a mechanism for redressal of complaints and within a month thereafter a technical committee under the chairmanship of joint secretary (gas) will submit a final report on the pricing structure to be followed,'' he adds.

Various consumer associations, such as the Forum of Natural Gas Industrial Consumers (FNGIC), Mumbai Grahak Panchayat, Mumbai Taxi Association, Mumbai Autorikshawmen's Union, have been alleging that MGL's pricing policy is discriminatory.

FNGIC, which is the body of industrialists and business houses like Mahindra & Mahindra, Larsen & Toubro, Parle Biscuits, Special Steels, Godrej, Haldyn Glass Works and Vitrum Glass Works, says Oil and Natural Gas Corporation has been supplying natural gas to Gas Authority of India for Rs 2,100 per 1,000 cubic meters of gas and Gas Authority of India (GAIL) is supplying the same units of gas to MGL for Rs 2,850 with a transportation cost of Rs 410 and sales tax.

''But MGL is selling its gas in Mumbai for Rs 8,342 per 1,000 cubic meters for industrial consumers and for Rs 11,500 for domestic consumers. This price fluctuates and during the period January 2001 till October 2002 there was abnormal increase of around 40 per cent in the price of gas,'' alleges FNGIC.

Naik has also directed GAIL to look into the technical aspects of the gas supply and to take appropriate action through MGL for reducing the waiting period. ''The state government will be requested to constitute a high-powered monitoring committee under the chairmanship of the state chief secretary to review the infrastructure constraints and for coordination in the implementation of the plan of action by MGL.''

The government, he adds, has plans to establish 46 CNG stations with a compression capacity of 3.95 lakh kgs per day by December 2002 and 55 stations by March 2003 with a compression capacity of 5.4 lakh kgs per day.