When it became clear that key constituents like railway minister Mamata Banerjee and agriculture minister Sharad Pawar would not be attending the EGoM meeting and a decision would not be taken, the oil ministry pressed IGL and MGL to defer the CNG price hike decision
The government has asked compressed natural gas (CNG) retailers in the national capital and Mumbai to defer by a week the hike in CNG price that had become necessary following doubling of natural gas price, reports PTI.
Indraprastha Gas Ltd (IGL) in Delhi and Mahanagar Gas Ltd (MGL) in Mumbai were to hike price of CNG they sell to automobiles by 25% and that of gas piped to households for cooking purposes by close to 6% from today.
The two companies received calls from the oil ministry yesterday morning asking them to defer the decision till 15th June, a source privy to the communiqué said.
Following the "verbal" order, the two firms did not go ahead with their planned price increase from today.
The oil ministry had in a 31st May written order detailing the decision of the Cabinet to increase natural gas price to $4.2 per million metric British thermal units (mmBtu), had stated that IGL and MGL can hike CNG and piped gas prices from 8th June.
The CNG price hike was to coincide with a planned increase in petrol and diesel rates from 8th June.
The source said yesterday's diktat came hours before an Empowered Group of Ministers (EGoM) was to meet on raising petrol and diesel prices in sync with cost.
However, when it became clear that key constituents like railway minister Mamata Banerjee and agriculture minister Sharad Pawar would not be attending the EGoM meeting and a decision would not be taken, the oil ministry pressed IGL and MGL to defer the CNG price hike decision, he said.
The EGoM is to meet again in a week to 10 days time to consider freeing auto fuel prices from government control, a move that will result in petrol prices going up by Rs3.35 a litre and diesel rates by Rs3.49 per litre.
"While the decision to raise natural gas price came into effect from 1st June, the oil ministry on purpose had stated in the order that city gas suppliers (like IGL) should effect any hike from 8th June," the source said.
The government decision to raise natural gas prices from Rs3.2 per cubic metre to Rs7.5 per cubic metre ($4.2 per mmBtu) would have resulted in CNG price in Delhi going up by Rs5.60 per kg to Rs27.50 a kg. Piped natural gas price was to be raised from Rs15.92 per cubic metre to Rs16.85 per cubic metre.
The CNG rate hike would have narrowed the price advantage the environment friendly fuel had over petrol and diesel and it was felt that this would be coupled with a price hike in conventional transport fuels, the source added.
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