IGL may hike CNG price to recover ‘corona costs’

New Delhi: IGL is considering raising the price of CNG as a sharp decline in sales due to the lockdown has proven inadequate to cover operational costs and additional expenditure incurred to make stations corona-ready.

Sources told TOI the company was not looking at raising the price of PNG (piped natural gas). But continued under-recovery on CNG may affect the company’s Rs 1,500-crore plan to expand clean fuel coverage, they said without indicating the quantum of hike being considered.

The company had cut CNG price by Rs 3.2 per kg and PNG rate by Rs 1.55 per unit from April 3. After the reduction, the company needed daily sales to reach 70% of the 35 lakh kg sold in the pre-lockdown period of February to recover operational expenditure.

Sales had dropped 90% to 3.5 lakh kg in April after the countrywide lockdown began on March 25 as all public and private transport — except essential service vehicles — went off roads. Sales have rebounded to about 30% of the pre-lockdown level in May, which is not enough to recover costs.

The sharp drop in sales had forced the company to shutter 250 of its 526 stations in the NCR. But the company continued to incur expenditure on paying salaries, fixed charges for power connections, maintenance of equipment and rent. In Delhi, DDA charges land rental of Rs 1.5 crore per year and collects the annual amount in advance.
In addition, hardship incentives had to be paid to staff deployed during the lockdown. IGL also had to spend additional money on equipping CNG station staff and creating new facilities to conform to the corona guidelines.