Compressed natural gas (CNG) price in the state is now selling at a record high of Rs66.30 per kg. Close on the heels of the hike in petrol and diesel prices, one of the city gas distribution companies in the state has revised the CNG price citing sharp decline in the rupee vis-à-vis the US dollar, while other companies are also expected to follow suit.
GSPC Gas, a part of the state-owned Gujarat State Petroleum Corporation (GSPC), has revised prices of CNG, which is used by vehicles, from Rs63.30 per kg to Rs66.30.
Following the revision, CNG price in the state is now the highest ever, surpassing the previous high of Rs65.80 per kg, the price at which Adani Gas is selling currently. “The hike is with effect from September 4,” a GSPC Gas official said.
GSPC Gas, which is the largest CGD in the country, sells CNG on outskirts of Ahmedabad city, as well as in several districts across Saurashtra, central and south Gujarat.
Industry experts attributed the increase to the sharp decline in the rupee vis-à-vis the US dollar in the last few months.
The dollar was trading at around Rs55 in May, but has now strengthened to Rs67-68, an increase of more than 20%.
“The depreciating rupee has led to huge increase in the input cost. There is no option really but to pass on the increase in gas costs,” said an industry expert. GSPC Gas has also revised the price of industrial piped natural gas (PNG) from Rs35.50 per standard cubic metre (scm) to Rs37.40 per scm.
Adani Gas, which sells gas in Ahmedabad city, has increased the price of industrial PNG from Rs35.90 per scm to Rs38.40 per scm, with effect from September 1. Adani is also expected to hike CNG price, but officials said a final decision has not been taken.
Most of the CGDs operating in the state are incurring heavy losses, and are considering steep price hikes, but are taking time fearing backlash from consumers.
“We are contemplating a hike. The only issue is that gas prices in Gujarat are already very very high. We fear that customers will revolt if prices are increased further,” said an official.