Regulator asks IGL to reduce gas prices

New Delhi -  Piped cooking gas for households and compressed natural gas (CNG) for vehicles is likely to become cheaper in the national capital with the regulator asking Indraprastha Gas  Limited (IGL) to cut the network tariff and compression charge.

The Petroleum and Natural Gas Regulatory Board (PNGRB) has asked the firm to reduce its network tariff by 63 percent to Rs.38.58 per million British thermal units (mmBtu) as against  Rs.104.05 per mmBtu. It has also cut compression charge for CNG by 59 percent to Rs.2.75 per kg from Rs.6.66 per kg.

The PNGRB has not only fixed the charges retroactively from April 1, 2008 but also ordered IGL to refund the difference to customers.

Following the order issued Monday, the stock price of the company tumbled 33.66 percent at Rs.229.80 Tuesday on likely hit to the margin of the firm. In intra-day trade, the share price  crashed to 52-week low of Rs.170.

Meanwhile IGL has approached the Delhi High Court against the order.

M. Ravindran, managing director of IGL, said the firm had challenged the constitutionality and legality of the powers of the board to fix the tariff.

IGL had last hiked the prices of CNG gas in Delhi by Rs.1.70 a kg and by Rs.1.90 per kg in Noida, citing rise in input cost as the factor, in March.

The current consumer price of CNG is Rs.35.45 a kg in Delhi and Rs.39.80 a kg in Noida, Greater Noida and Ghaziabad.