igl: IGL raises CNG prices, says rates to remain high – Times of India

NEW DELHI: Indraprastha Gas Ltd (IGL) late on Friday night raised CNG (compressed natural gas) prices in the Delhi to Rs 75.61 per Kg, even as the company MD Sanjay Kumar said rates would remain elevated in the near future due to high international prices of natural gas and the management was looking at cutting operational costs to soften the blow for consumers.
The rates In Noida, Ghaziabad, Gurugram and other cities in U.P., Haryana and Rajasthan served by the company will be between Rs 78.17 and Rs 86.07 a kg.
“Several factors determine CNG prices. One of them is price of natural gas from various sources, including LNG (gas imported in ships). Gas prices are expected to remain high in the foreseeable future because of the Russia-Ukraine conflict. That will impact retail CNG rates,” Kumar said.
Limited availability of government-controlled gas has forced IGL to use more LNG to meet double-digit growth in CNG and PNG (piped natural gas) demand. This has raised input cost, which is expected to go up as demand rises further.
“LNG’s share in sales stood at 20% in IGL’s gas portfolio in 2021-22. LNG is still hovering around $20 per unit, which is double the normal. It will rise further if summer is unusually warm in the Western Hemisphere due to demand for cooling. Domestic gas prices too are expected to rise further in October. These will maintain pressure on price point,” Kumar said.
He pointed to rupee exchange rate as another factor, saying every dollar increase in gas prices has an impact of Rs 4-4.50 on retail rates.
Kumar said IGL will have to revise rates every month because under a new gas allocation guideline, state-run GAIL will set a price every month for supplying gas every month after pooling government-controlled gas, market-priced gas from domestic fields and LNG.
Kumar admitted that it may not always be easy to pass on the entire cost escalation. “We are tightening our belts and looking at reducing costs to deal with the situation,” he said.

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