Gujarat Consumers to Pay More for CNG Following Price Hike

Following price hikes for diesel and LPG, consumers in Gujarat will now have to pay more for CNG as well. An oil & gas state run PSU, the Gujarat State Petroleum Corporation announced a hike in prices of CNG on Monday of INR 3.25 per kg that will impact the industry as well as households in Gujarat.

An official from GSPC was quoted as saying that the price hike of INR 3.25kg for CNG will begin from today. CNG will now be available for INR 40.25 per kg across their 110 gas stations in Gujarat. Early last month, the PSU had increased the cost of CNG to INR 37 per kg from the earlier INR 34.45 per kg, which they accounted to non-allocation of the fuel of the Centre’s KG-D6 reserves.

In the last one year itself, the cost of CNG in Gujarat has increased by more than 35%. Adani Gas, a City Gas Distributor, which operates in Vadodara and Ahmedabad, also raised prices of CNG. Others include Sabarmati Gas, GSPC gas and Charotar Gas Sahakari Mandali. This move will have an adverse effect on auto users in Gujarat.

The reason cited for the recent price hike is because of an increase in prices of imported LNG. The cost of LNG is linked to fluctuations in crude price and it was therefore important to hike the cost of the gas for retail users as well, so that it would economically viable. While the PSU has increased prices by INR 3.25 per kg, Adani Gas, a private company has hiked price by INR 2.50 per kg, from the earlier INR 38 to INR 40.50. Another gas supplier, GSPC has increased prices to INR 37 per kg, from the earlier INR 34.45kg in May, 2011. Meanwhile, another distributor, Gujarat Gas has not hikes prices.

An official from the company said that they have not opted for a price hike as of now. This distributor has around 110 CNG stations in the state in comparison to Adani’s 54 stations. Both the companies sell about 500,000 kgs of CNG overall every day, in comparison to the state’s total consumption of 700,000 to 800,000 kgs.