The government has also decided to supply cheaper domestic gas to retailers in cities like Delhi and Ahmedabad.
Oil Minister M Veerappa Moily said that the government has decided to raise allocation of natural gas from domestic fields to distributors to 100 percent from the current limit of 80 percent.
This would be done by cutting supplies to non-core sectors like petrochemicals, steel and refineries.
The decision would help in reduction of CNG prices retailed to automobiles in cities like Delhi and Ahmedabad.
It will also bring down prices of piped cooking gas to households as cheaper domestic gas will replace costlier imported LNG that entities were using now.
"Our target is common man. We want to give common man a relief and in a way this is an anti-inflationary measure," Moily said.
Presently, Mumbai sources its entire gas requirement from domestic fields and as such there will be no cut in rates in the city. However, in Delhi, which presently uses as much as 28 percent of costlier imported LNG, and cities in Gujarat like Ahmedabad which too were heavily reliant on imported fuel, will see a price cut.
"This (move) would lead to reduction in prices of CNG and PNG across the country (except in those cities which are already getting 100 percent domestic gas like Mumbai). The price of CNG in Delhi would be reduced by about Rs 15 per kg (about 30 percent). There will also be a reduction of about Rs 5 per cubic metres (about 20 percent) in the price of PNG," Moily said.
While the orders for increasing domestic gas supply to CNG entities were issued today, the decision would take 2-3 days to take an effect as gas firms tie-up and sign new supply agreements.
JPN/Agencies
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