Ahmedabad gas prices among the costliest in country

If the hike in natural gas prices has flared up consumers’ anger in Ahmedabad, they have every reason to feel so. A comparison of CNG and PNG prices in various cities shows that consumers in Ahmedabad are shelling out at-least 40 to 50% than their counterparts in most other places.

With Wednesday’s revision, CNG price in Ahmedabad has crossed Rs60 and is selling at Rs60.15 per kg. As against this, CNG in Mumbai and Thane costs just about Rs34 per kg, while it is a shade under Rs40 in the country’s capital - Delhi. In other cities of Gujarat, CNG prices are between Rs52 and Rs57 per kg, which is higher than each of these cities.

"CNG prices in Pune (Rs42/kg), Lucknow (Rs43.48/kg) and Agra (Rs50.76/kg) are also sharply lower than in Ahmedabad. Indore, where Aavantika Gas sells CNG for Rs61 per kg, is the only major market where consumers pay more than consumers in Ahmedabad,” said an oil & gas industry expert.

According to industry experts, the biggest reason for the huge differential in CNG pricing is the fact that Adani Gas, which distributes gas in Ahmedabad, is entirely dependent on imported gas in absence of access to domestically produced gas, while companies in Delhi, Mumbai and the other cities are supplied domestic gas.

“There is a huge difference in price of domestic and imported gas, and this reflects in the pricing of CNG across cities. Gas sourced at $ 16 per million metric British thermal units (mmbtu) from international markets cannot compete with domestic gas sourced at $ 4.2 to 5.75 per mmbtu,” the expert said.

There is also a stark difference in prices of domestic PNG in Ahmedabad and the other major cities. Adani Gas has revised its domestic PNG price to Rs31 per standard cubic metre (scm), while the price is around Rs22 per scm each in Delhi and Mumbai.

“In Pune, domestic PNG is priced at Rs21.28, in Lucknow Rs20.50 and in Agra Rs21.12 per scm. Indore is the only city where PNG (priced at Rs35 per scm) is higher than in Ahmedabad,” said a CGD official. High rate of VAT on natural gas in Gujarat, which stands at 15% and is the highest in the country, is another reason for the high price of CNG in the state. States such as Delhi, Maharashtra and MP have lower tax rate on gas.

On its part, the state government has been clamouring for allocation of domestic gas to city gas distribution companies in the state.

“We will bring down gas prices in the state by at-least 30% if companies in Gujarat are allocated domestic gas as CGDs in Mumbai and Delhi are. Unfortunately, the central government hasn’t allocated domestic gas to Gujarat in spite of clear instructions from the Gujarat High Court,” state energy minister Saurabh Patel, said.
 

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