Indraprastha Gas Ltd (IGL) is scouting for committed supply of natural gas to ensure the fuel is available at affordable price to its consumers. The company has approached BG, Shell, GAIL (India), and Bharat Petroleum Corporation for long-term commitments.
Today, the natural gas price in the country varies from $4.2/mmBtu to $18/mmBtu (excluding the taxes and levies). With the allotted gas from ONGC fields at administered price already fully utilised and stoppage of Reliance Industries-operated D6 gas supplies, IGL has to depend on more expensive imported gas (liquefied natural gas). Expectations are that the proportion of imported gas is likely to increase in the coming days.
“We are left with no other alternative but to source costly imported gas from the spot market to meet the ever increasing demand,” Mr M. Ravindran, Managing Director, IGL, told
IGL, a joint venture of GAIL, Bharat Petroleum Corporation and Government of NCT of Delhi, is into the business of compressed natural gas and piped natural gas. The company sells approximately 3.44 mmscmd of gas, of which 2.7 mmscmd is the administered price gas, 0.7 mmscmd is imported gas from term commitments. To fill the gap the company sources spot market gas which is even more expensive.
“High gas price has contributed to higher cost of sourcing the gas. The base price of natural gas procured by IGL from all its sources – administered price, D6, long-term liquefied natural gas as well as that from spot market – is in dollars per mmBtu and currency fluctuation versus rupee compels the company to pass it on to the consumers,” he said.
Recently, the company had to increase the retail price of compressed natural gas. At that time, Mr Ravindran said: “We have been forced to increase the retail price of compressed natural gas due to major increase in the input cost of entire pool of natural gas being sourced by us as a result of recent appreciation of dollar vis-à-vis rupee and the increased dependence on imported gas from spot market.”
The revision in price resulted in an increase of Rs 1.75/ kg in the consumer price of compressed natural gas in Delhi and Rs 2/ kg in the consumer price in Noida, Greater Noida and Ghaziabad. The new consumer price is Rs 33.75/ kg in Delhi and Rs 37.90/kg in Noida, Greater Noida and Ghaziabad.