New Delhi: Price of Compressed Natural Gas (CNG) may be hiked by up to Rs 2 per kg in the next few days as rupee devaluation has pushed up input cost.
City gas retailers including Indraprastha Gas Ltd, which supplies CNG to automobiles and piped cooking gas to households in the national capital, are likely to announce fuel price revision over the weekend, sources privy to the development said.
IGL had last raised CNG in Delhi by Rs 2 per kg to Rs 32 per kg from October 1.
Sources said the hike was necessitated because IGL and other city gas firms were being forced to buy expensive imported LNG as supplies from Reliance Industries' eastern offshore KG-D6 gas field have dried-up due to fall in output.
Also, the rupee depreciation has made raw material -- that is, natural gas from Reliance, state-owned GAIL and imported LNG -- even costlier.
Rupee was at about Rs 49.50 to a US dollar at the time of last price hike and it is on Monday close to Rs 53 to a US dollar.
The government has fixed the price of domestic gas produced by state-owned ONGC and RIL in US dollar terms and every time the rupee depreciates against the US currency, users end up paying more. Gas from both Reliance and ONGC is priced at USD 4.20 per million British thermal units.
IGL contracted 0.308 million standard cubic metres per day of gas from RIL, but following a 35 percent drop in KG-D6 output, supplies to city gas projects have been cut so that demand of priority power and fertiliser sector can be met.
Sources said companies like IGL and Mahanagar Gas Ltd in Mumbai are buying imported liquefied natural gas (LNG), which is priced at over USD 17 per mmBtu, to meet the shortfall.
IGL get up to 2.7 mmscmd of gas from domestic fields of Oil and Natural Gas Corp (ONGC) and buys another 0.6 mmscmd as LNG.