New Delhi, April 17
The Oil Ministry has not made any fresh allocation of natural gas from domestic fields to the city gas sector, sending CNG and piped cooking gas prices to record highs but the ministry insisted that allocations have not been stopped and providing more for the sector would lead to cut in supplies to industries like power and fertiliser.
Despite a decision of the Union Cabinet to give 100% gas supply under ‘no cut’ priority to the city gas distribution (CGD) sector, current supplies are at March 2021 demand level. This has driven city gas operators to buy high priced imported LNG to make up for the shortfall, leading to a record spike in prices, three sources aware of the matter said.
Besides the shortfall in the allocation, the prices of administered pricing mechanism (APM) gas for CNG and PNG has been revised from $2.90 per million British thermal unit to $6.10, an increase of 110%.
Commenting on the issue, the ministry said it “is waiting for the updated data for the period October 2021 to March 2022 from CGD entities for the allocations in April 2022. This is yet to be received from the entities.” The ministry is supposed to make an allocation of domestic natural gas, which costs a sixth of imported LNG, every six months — in April and October every year — based on verified demand in the previous six months. But no allocation has been made since March 2021, sources said.
Responding, the ministry said: “Based on data of October 2020 to March 2021 consumption, the allocation for April-October 21 was revised as per the guidelines in April last year.” — PTI
Rate up by 60%
- CNG prices have risen by 60 per cent or over Rs. 28 per kg in one year and PNG by over a third
- The prices of administered pricing mechanism (APM) gas for CNG and PNG have been revised from $2.90 per million British thermal unit to $6.10, an increase of 110%