Petronet LNG Limited (PLL), the country's biggest gas importer, has projected a 26% rise in the price at which it supplies gas to Gujarat State Petroleum Corporation from April 2012 to March 2013.
Here's some more bad news in store for gas consumers. CNG prices in Ahmedabad, which crossed Rs50 per kg recently, are projected to rise sharply and touch Rs60 - Rs65 a kg by March next year. The prices of piped natural gas can also be expected to go northwards over the coming months.
Petronet LNG Limited (PLL), the country's biggest gas importer, has projected a 26% rise in the price at which it supplies gas to Gujarat State Petroleum Corporation from April 2012 to March 2013.
"PLL's projections show an increase of around two per cent every month in the gas supply price," said a senior official.
From Rs40 per kg in June 2011, CNG price in Ahmedabad touched Rs45 per kg in November, and crossed Rs50 a kg in April 2012.
DNA was the first to write in June 2011 that CNG price could touch Rs50 in a year. The price was almost unthinkable at the time, and even industry experts were surprised by the manner in which prices had gone up.
Interestingly, PLL had projected 22% increase in gas price for GSPC in 2011-12, while the actual increase was 27%.
And if PLL's price projections for the current year are anything to go by, CNG could cross Rs60 and even touch Rs65 per kg over a year or so.
"CNG price of Rs60 or even higher is a very distinct possibility. These are testing times, and no company can absorb this kind of hike. The only option is to pass on the hike to consumers," said an official of a city gas distribution company. However, officials warn that the rise could be even steeper if the rupee depreciated further vis-à-vis the US dollar from current levels and/or if gas prices went up. "These are factors beyond our control. All we can do is hope that gas prices cool down in international markets," the official said.
State energy minister Saurabh Patel blamed Centre's faulty policies for the spike in gas prices in Gujarat.
"This is a glaring example of Centre's discriminatory attitude towards Gujarat. Both Delhi and Mumbai get cheaper domestic gas, while Gujarat is entirely dependent on expensive R-LNG (re-gasified liquefied natural gas). The result is that Gujaratis have to pay much more for CNG than consumers in Delhi and Mumbai," Patel said. Spot LNG prices are currently in the region of $16 — 18 per Million Metric British Thermal Units (MMBTU) as against domestic gas which is priced at $4.20 — 5.75 per MMBTU. The minister claimed that CNG prices in Gujarat could come down by as much as 20 - 30% if the state was allotted domestic gas.
A CGD operator echoed the minister's view, but also pointed out the high rate of VAT on CNG in Gujarat. "Gujarat government levies 15% VAT on CNG, which is the highest in the country. CNG prices in the state can fall sharply if the tax is cut," he said.
The CNG selling price of Adani Gas, which also depends on GSPC for its gas requirements, is also seen in the range of Rs60 - 65 a kg in a year.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}