No magic wand left with Kejriwal to rollback CNG prices

On day one itself, a company that came into the itinerary of Delhi’s new chief minister Arvind Kejriwal was Indraprastha Gas Ltd (IGL) owing to an increase in prices of compressed natural gas (CNG) by 10 per cent.

However, sources say that it is unlikely that Kejriwal could do anything in this regard.

The new chief minister had a meeting with IGL managing director Narendra Kumar on Saturday, immediately after swearing in, as prices were increased on Friday midnight.

“We had a meeting with the chief minister and the new transport minister. He enquired us about the reasons of this immediate hike,” said a senior company official.

He added that since there is no value added tax for CNG in Delhi, the hope that state taxes can be cut may not work out. Since January this year, the state saw 26 per cent hike in CNG prices hitting consumers hardly.

The likely solution that appears before the AAP government is to seek for a higher quota of domestic natural gas for Delhi, which would bring down auto and cooking gas prices.

“We have increased the quota for city gas distribution entities by increasing the supply from 5.75 million tonne to 6.47 MT, thereby increasing the overall supply by 0.72 MT. This is by cutting the supply to non-priority sectors like steel and refineries. This was to ensure uniformity in supply of domestic gas after a court order,” a petroleum ministry official added. Hence the hope of bringing down the prices by increasing the allocation to 80 per cent from the current 75 per cent is unlikely to happen.

The ministry had directed state-run GAIL to re-allocate supply to CNG and piped natural gas in-order to bring about uniformity in prices across the country. This led to increase in prices in Delhi and Mumbai.

The new consumer price of CNG in Delhi is Rs 50.10 per kg, which is 10 per cent higher than Rs 45.6 per kg in September, Rs 41.19 per kg in June and Rs 39.9 per kg in January 2013. The new consumer price of PNG to the households in Delhi was also revised from Rs 27.50 per scm to Rs. 29.50 per scm up to consumption of 30 scm in two months with effect from Friday.

Beyond consumption of 30 scm in two months, the applicable rate in Delhi would be Rs 52 per scm. Delhi government has 5 per cent stake in the company, while Bharat Petroleum Corp and Gail has 22.5 per cent each.

Meanwhile, auto drivers held a protest outside petroleum minister M Veerappa Moily’s house on Sunday seeking a rollback on CNG prices.