CNG price may rise due to Centre's guidelines

The Delhi government today told the Delhi High Court that it apprehended rise in price of CNG due to reduction in allocation following new guidelines by Ministry of Petroleum and Natural Gas even as the Centre said that any shortfall will be met by import of the fuel.

The price of CNG or compressed natural gas in the national capital was just last week hiked by a steep Rs 4.50 per kg, the second increase in rates in three months.

The guidelines, which may cause reduction in supply of CNG to Delhi, were issued by the Ministry in pursuance of a Gujarat High Court order that Ahmedabad should also get the fuel for domestic and vehicular usage at the same rate applicable to Delhi and Mumbai to enforce the right of equality.

The supply of CNG is not affected in Delhi as the shortfall in domestic supply is being offset by import of CNG, the counsel for the Ministry said.

Justice Manmohan granted a week's time to the Centre to file its response to a petition filed by Delhi Contract Bus Association seeking that "the allocation and supply of domestic gas to the city of Delhi and National Capital Region through respondent 2 (Indraprastha Gas Ltd) be not reduced."

However, Delhi government expressed apprehension that the Petroleum Ministry guidelines will have an adverse impact on commercial vehicle operators and any reduction in CNG allocation to Delhi would lead to fillip in prices of CNG and essential commodities.

The counsel for city government, in a written submission, said as an effect of redistribution, the domestic gas allocation for Delhi NCR would reduce resulting in more consumption of imported gas and will result in substantial price increase.

It would adversely affect the transport sector in Delhi, the Delhi government said.

The plea said the "guidelines for allocation/supply of domestic natural gas" to City Gas Distribution (CGD) entities for CNG (transport) and PNG (domestic) were "arbitrary, illegal, unconstitutional" and contrary to a 2002 apex court order.

The Gujarat HC had directed the Ministry to maintain uniformity in allotment of natural gas and provide the fuel to Ahmedabad at the same rate it is supplied to Delhi and Mumbai.

According to subsequent guidelines issued on November 14, 2013, the Centre decided to redistribute 5.75 MMSCMD (which is the present share of domestic gas in the entire consumption of gas for transport and domestic sector) among all entities/ cities.