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‘Burden may not be passed'

NEW DELHI:The Petroleum and Natural Gas Ministry on Thursday hinted that companies engaged in the business of retailing compressed natural gas (CNG) and piped natural gas (PNG) might not pass on the entire impact of the over two-fold hike in natural gas prices to consumers.

Rates of CNG sold to automobiles in Delhi and Mumbai will have to be raised by about Rs.6 a kg, while piped gas for households would have to be hiked by about Rs.4 per cubic metre because of the government's decision to raise the input gas price to Rs.7.50 per cubic metre.

“We hope that passing on the entire burden may not be necessary for companies retailing CNG and PNG to automobiles and households in Delhi and Mumbai,'' Petroleum Secretary S. Sundareshan told reporters here.

Indraprastha Gas in Delhi and Mahanagar Gas in Mumbai are the only city gas companies in the country hat buy government-controlled gas. “These companies are majority owned by oil PSUs and the government is the largest shareholder in these oil PSUs. So we hope the companies will take a considered view,'' he said.

The Union Cabinet on Wednesday had hiked the price of gas sold to power, fertilizer and city gas projects from Rs.3,200 to Rs.6,818 per thousand cubic metres. Mr. Sundareshan said the decision would come into effect once it was notified in the next few days. It would also lead to a rise in fertilizer production costs and power generation tariffs. Fertilizer prices would not be increased, as the government subsidises the sector. But the decision would result in the fertiliser subsidy rising by Rs.3,500 crore.

The new price will be for the period up to March 31, 2014.

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