Parl panel raps Indraprastha Gas Ltd for charging 'exorbitantly'

A parliamentary committee has pulled up Indraprastha Gas Ltd, the sole supplier of compressed natural gas and piped natural gas in Delhi and NCR, for charging customers at a higher price despite sourcing gas at much cheaper rates through administrative price mechanism (APM).

The committee has also asked the government to implement uniform gas pricing policy soon.

The parliamentary standing committee on petroleum and natural gas in its latest reports has said that the landed cost of APM gas is Rs 8.70 per std cubic metre (SCM).

It said IGL gets 78 per cent of its requirement from APM gas and sources only 17 per cent through imports.

High retail price

Despite that the retail price charged by IGL to domestic household in Delhi is up to Rs 34 per SCM.

As against this, the Gujarat State Petronet Ltd (GSPL), which operates in Surat, Bharuch and Ankhaleshwar, charges Rs 17.50 per SCM despite sourcing all its requirement through import, whose landed cost is above Rs 36 per SCM.

“The committee fails to understand as to how IGL, which is allotted 78 per cent of its gas requirements from APM gas, charges its customers compared to GSPL, which meets its entire requirement through imports,” the report said, asking the ministry of petroleum and natural gas to move forward on uniform pricing of gas soon.

The panel also noted that the prices of piped natural gas (PNG) and compressed natural gas (CNG) are being fixed by entities operating the city gas distribution (CGD) projects, which fix or revise their prices “arbitrarily”.

“In the cities CNG and PNG are supplied by a single entity. In absence of competition, the entity should not take advantage and revise prices arbitrarily,” the committee observed. It suggested to the government that regulation of natural gas prices be done on the lines of other sectors, namely power.

Slow going

The committee expressed its displeasure on IGL going slow in providing PNG connection.
IGL, which started operations in Delhi in 1998, has till date provided only 2.63 lakh connections, which is covering at least 33 per cent of households.

“The committee is constrained to observe that the progress achieved in the last 15 years is modest and over 67 per cent households still remain uncovered by PNG connections,” said the report.

It has asked the union oil ministry and IGL to quicken the expansion of household connections to the remaining areas of Delhi and strive to achieve 100 per cent connections in areas where Indraprastha Gas Ltd network is already in place.

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