CNG price may go up in Mumbai after oil ministry decision

The price of compressed natural gas (CNG) in Mumbai may go up by about Rs16 a kilogramme and piped cooking gas by Rs10 after the union government's decision to divert some of its gas to Gujarat.

The petroleum ministry last month decided to allot available domestically produced natural gas to all CNG retailers in the country at a uniform price. At present, cheaper domestic gas is mostly allocated to firms in Delhi and Mumbai while those in other cities have to depend on costlier imported gas.

Gas is being made available to retailers in Gujarat by cutting supplies to Mumbai Gas Ltd (MGL), which sells CNG to automobiles and piped cooking gas to households in Mumbai.

MGL last month wrote to the union ministry saying, ''CNG and domestic PNG prices could be increased by about Rs16 per kg and about Rs10 per standard cubic meter to the transport segment and domestic households, respectively.''

The company currently gets about 2 million standard cubic meters per day of gas at a price of $4.2 per million British thermal unit. MGL said its supplies will be reduced by about 28 per cent to 1.45 mmscmd after the order is implemented.

Oil ministry officials said the order to redistribute the available domestic gas among all CNG and piped gas retailers will ensure growth of the city gas sector.

Gas supplies to entities in Gujarat were to begin from 1 December, but technical issues have delayed it. Gas coming from ONGC's fields is short of the pressure required for the fuel to be pumped into the city gas network.

The Gujarat High Court had on 25 July last year ordered gas be made available for city gas distribution (CGD) projects in Ahmedabad at the same rate as it was provided in Delhi and Mumbai. The Supreme Court upheld this order on 30 September.

The Oil Ministry allocated 6.4 mmscmd of domestically produced gas to meet almost 80 per cent of the requirement of CNG and PNG in all cities.

Allocation is to be made in proportion to the demand for CNG and PNG in cities, the order said, adding 8.02 mmscmd of gas is consumed in the CGD sector currently.

Of the 6.4 mmscmd allocated for CGD sector, 5.93 mmscmd would come from fields operated by the State-owned Oil and Natural Gas Corp (ONGC) and the remaining 0.47 mmscmd from the BG-operated Panna/Mukta and Tapti fields in western offshore.