CNG in Gujarat

Vol 15, PW 6 (22 Sep 11) News in Brief

IndianOil, Bharat Petroleum and Hindustan Petroleum have wisely made peace with angry CNG dealers in Gujarat by raising their commissions on CNG sales on September 1.

This comes as a relief for Gujarat-owned gas retailer GSPC Gas, which was unwittingly caught in the crossfire between the dealers and the state-owned oil marketing companies (OMCs). GSPC Gas sells CNG from dispensers at 88 petrol and diesel retail stations in Gujarat, owned by IOC, BPCL and HPCL.

Until May 25, GSPC paid a fixed commission of Rs1/kg ($0.02) to the OMCs for any CNG sold. Of this commission, 57% went to the dealers while the OMCs swallowed 43%.

From May 25, GSPC began paying Rs1.45/kg ($0.03) as commission but the dealers’ share of this was slashed to 50%, leading to vociferous protests. As of September 1, CNG dealers are now getting 59% of the commission or 85paise/kg ($0.02) – hopefully enough to keep them happy.

Gujarat has nearly 200 CNG stations in total.