Gas for Delhi and Mumbai diverted to Gujarat

Vol 17, PW 8 (14 Nov 13) People & Policy

Hotels and factories in Mumbai and Delhi will be the biggest casualties when the oil ministry implements a Gujarat High Court ruling, diverting 500,000 cm/d from Mahanagar Gas and Indraprastha Gas to the BJP-controlled state by end-November.

Seven gas retailers in Gujarat will be the biggest beneficiary of this diversion, which the oil ministry is preparing to implement following the High Court order on October 26 ordering Delhi to make available cheap domestic gas to Adani Gas, GSPC Gas, Gujarat Gas, Sabarmati Gas, Vadodara Gas, Charotar Gas and Hindustan Petroleum. Oil secretary Vivek Rae must report back to the court on November 18 to outline progress.

Backstage meanwhile ministry officials are identifying how much gas Delhi-based IGL and Mumbai-based MGL supply to non-priority sectors, in particular hotels and factories. MGL has until now been sourcing cheap domestic gas from parent GAIL at Rs10/cm ($0.15) and selling it at Rs54/cm ($0.86).

“We don't get gas for our priority sectors (households and CNG for cars),” says a gas retailer in Gujarat. “But in Mumbai they supply domestic gas to non-priority sectors!” Most gas retailers in Gujarat use R-LNG as domestic gas is not available.

Ahmedabad-based Adani will be first in line to receive diverted gas, as it has the most CNG customers, followed by GSPC Gas and Gujarat Gas.