CNG prices in Delhi cut by 30%; piped gas to cost 20% less

The UPA government today announced a 30-per cent reduction in the price of compressed natural gas (CNG) and a 20 per cent reduction in piped gas supplied to domestic consumers in Delhi.

Minister of petroleum and natural gas M Veerappa Moily today announced a reduction of Rs15 per kg in CNG prices and a reduction of Rs5 per cubic metre in the price of piped gas supplied to domestic consumers in Delhi.

The move to reduce cost of natural gas for consumers comes close on the heels of a nationwide hike in the annual quota of LPG cylinders to households to 12 against 9 prescribed earlier.

The petroleum ministry also announced a simultaneous increase in the allocation of domestic gas to GAIL for supplying entities for CNG (transport) and PNG (domestic) segments with immediate effect.

Since the central government has assured that CNG would be provided at uniform prices to all states having a distribution network, the petroleum ministry expects a price reduction of 25-30 per cent in CNG prices across the country.

"If the move helps us in polls, it would be incidental. Our aim is to help the common man," Moily said while announcing the price cut.

The Indraprastha Gas Ltd had in December, raised the price of CNG in Delhi by Rs4.50 per kg. It had also raised the price of cooking gas piped to kitchens by Rs5.15 per kg.

The Delhi government had planned to approach the Supreme Court to challenge centre's decision to cut allocation of cheaper domestic natural gas to the national capital following an order by the Gujarat High Court.

Following a Gujarat HC order, the central government had ordered all domestically available natural gas for city gas projects to be equitably distributed among all the companies in the country rather than convert the fuel into compressed natural gas (CNG) for sale to automobiles.

Gas prices in the country were expected to go up substantially after the government raised producer prices of natural gas in the country to $8.4 per million British thermal units (mmbtu) from 1 April this year.

Secretary in the ministry of petroleum and natural gas Vivek Rae, meanwhile, said that the price could range between $7 and 8 per mmbtu based on current international gas price.

On the applicability of new price for Reliance Industries Ltd operated KG-D6 fields, the official said the assessment of bank guarantee will be based on the initial assessment target of the quarter under review.