City gas distributor Indraprastha Gas Ltd. has raised the prices of Compressed Natural Gas (CNG) in Delhi-NCR effective Saturday, December 17. Prices have been hiked by nearly Re. 1 per kg.

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In Delhi, CNG will now cost Rs 79.56 per kg, compared to the earlier price of Rs 78.61. In Noida, Greater Noida and Ghaziabad, a kilogram of CNG will cost Rs 82.12, compared to the earlier price of Rs 81.17.

CNG price in Gurugram will now be Rs 87.89 per kg.

In an interaction with CNBC-TV18 on December 1, Pawan Kumar, director of commercial operations at Indraprastha Gas had warned of the company's margin being hit in the December quarter due to their inability to pass on the increase in gas costs.

Incidentally, in an interaction with CNBC-TV18 in September, Pawan Kumar had mentioned that the company will not pass any increase in gas prices to customers in the short-term and will absorb them.

“In the short-term, we can absorb any hikes, we will not pass on to the consumers, we are working on a two-pronged strategy to reduce our internal operating expenses and to maximise sales," he had said back then.

Kumar also went on to say that if the recommendations of the Kirit Parikh panel are approved, it will be a welcome move as it will bring down the overall costs for Indraprastha Gas by as much as 18 percent to $7.98 per mmBtu.

On the timelines for these recommendations to be approved, Kumar said that it may take a month before a final decision is taken.

On the question of gas prices being bought under the ambit of GST, Kumar said that there would be savings worth nearly Rs 200 crore in case such a decision is taken.

"It will help the company as well as the consumers because currently we are paying around Rs 200 crore of GST. With the gases brought under GST there'll be net saving of Rs 200 crore on the basis of input cost of GST and the industry also will get a breather that they will be able to get a input credit of GST," he said.

Brokerage firm Citi wrote in a note that in case the Kirit Parikh committee recommendations are accepted by the government, they have the potential to reverse years of underperformance. It cited IGL and GSPL as its preferred picks.

First Published:Dec 17, 2022 9:38 AM IST