Factories want R-LNG at half price

Vol 16, PW 19 (18 Apr 13) News in Brief

Factories at Belgaum city in north Karnataka say they are willing to switch to piped gas but only if GAIL cuts its price by half.

GAIL is charging Rs38.75/cm ($0.70) for piped R-LNG, based on a LNG import cost of $16/mmbtu. Factories in Belgaum are willing to pay no more than Rs25/cm ($0.45).

“We know gas is good and it is the future,” says a Belgaum-based foundry owner who uses diesel. “But at GAIL's price we just cannot afford it.

” A factory manager points out gas demand in Belgaum could be huge as the area has more than 147 foundries and 1200 factories producing car parts and machine tools. "GAIL should offer discounted rates for factories like us,” he says.

Belgaum is also home to food processing facilities that produce 40,000-tonnes of mangoes, 43,000-tonnes of bananas and 13,100-tonnes of grapes. Belgaum also boasts the world's second largest condom manufacturer, Hindustan Latex.