Cheap CNG is on the rise, what will the distributor do?

 

The center revises the price of natural gas produced from gas fields twice a year.  Old-field gas prices rose to $8.57 per million British thermal units from $6.1 this month.

From cooking gas to car oil, the people of India, like other countries, are suffering from high prices of fuel.  As an alternative fuel, the price of natural gas, which was slightly cheaper, is now on the rise.  As a result, the price of cooking, industrial (PNG) and transportation (CNG) fuel is rising.  Its initial impact has started in West Bengal as well.

• What's the story?

 The provision of PNG has not yet started in this state.  But supply and sale of CNG has started in parts of South Bengal including Kolkata.  Indian Oil-Adani Gas (IOAG), one of the companies involved in the business, recently hiked CNG prices by one step.  Even though the other two companies Hindustan Petroleum (HPC) and Bengal Gas Company (BGC) have not increased the rates yet, concerned parties are skeptical about how long they will be able to bear the financial burden.  None of the three companies wanted to comment saying that the price revision is internal.  There was no response as to whether HPC or BGC would discuss it.

CNG and PNG prices have increased by more than 70 percent in India in the last one year.  According to sources in Shilpa Mahal, the price of CNG per kilogram was Tk 68.5 and Tk 69.5 respectively at HPC's Nadia and Hooghly pumps on January 1.  Now it is 95 rupees.  At the beginning of the year, the price of fuel at BGC's pumps was Rs 67.67.  It increased to 89.25 rupees.  Besides this, the CNG price at IOAG pumps in Burdwan was Tk 78 last January 1.  It was 91 rupees till some days in this month.  According to the company's website, it has recently increased again to Tk 94.

CNG is always cheaper than petrol-diesel as a vehicle fuel.  But recently, the price gap has narrowed due to a rapid rise in natural gas prices.  Concerned car industry appealed to the Center for help.

• What's next?

 According to a section of concerned circles, there is no choice but to increase the price of HPC and BGC in the near future.  Because the main gas supply pipeline of the state-owned company Gale has not yet been built, the three distribution companies have to bring gas in big cylinders (cascade) in trucks.  As a result, companies are already selling CNG at the pump at a virtual loss.  The financial pressure has increased recently as the cost of buying gas increases.