GAIL Gas hit hard by high R-LNG prices

Vol 16, PW 9 (15 Nov 12) News in Brief

Blame high R-LNG prices around $16/mmbtu for lacklustre CNG sales by GAIL Gas at Sonepat in Haryana and Meerut in Uttar Pradesh.

GAIL Gas is selling up to 20,000-kg/day of CNG from two CNG stations in Sonepat and 18,000-kg/day from two stations in Meerut, both at Rs55/kg ($1). But increasing sales is difficult when customers can travel just 50-km to Delhi where Indraprastha Gas is selling CNG at Rs37/kg.

Indraprastha gets 2m cm/d of cheap D6 gas and some subsidised APM gas. “We have repeatedly written to the oil ministry seeking a domestic gas allocation but haven’t heard back,” complains GAIL Gas.

“It’s impossible to grow or compete with liquid fuels like diesel.” More, high R-LNG prices are preventing the company from increasing piped gas connections to homes beyond the present figure of 5000, as it cannot compete with subsidised LPG.

Since 2009 GAIL Gas also operates CGD networks at Kota in Rajasthan and Dewas in Madhya Pradesh.