Indian Express 22.09.2009
Piped gas: Price parity to be uphill task for VMC
As the Vadodara Municipal Corporation (VMC) readies for a joint venture with GAIL to provide piped gas supply to the entire city, the pricing factor is likely to remain a major cause of concern for the officials at VMC’s Gas department. At present, there are over 74,000 residents who get piped gas supply from the VMC. Once the JV is formed, the existing supply of gas which is one lakh cubic metres will reach 4 lakh cubic metres and the number of customers is expected to rise to four lakh.
According to VMC officials, they are almost through with the discussions about forming the JV and the formal announcement would be made soon. However, bridging the price gap will be a Herculean task for them.
“We had expected this discrepancy right from the time we decided to provide piped cooking gas to the entire city. It was bound to happen as the earlier agreement with GAIL was done long back and pricing was based on the then market scenario. Now, the market rates are different and we will be buying gas at a higher price,” said a senior VMC official.
Another official said that in Vadodara, customers get the supply at the cheapest rates in the state. “Be it Ahmedabad or Surat, customers are paying almost Rs 15 per unit (one cubic metre), whereas in Vadodara, they pay Rs 7.90 per unit. Once the JV is formed, we would get gas at the new price. As per the old rates, the VMC purchases gas for Rs 5 per cubic metre and the new rates will be somewhere close to Rs 15. We would be working out a formula to streamline this parity,” added the official. Shailesh Naik, who is handling VMC’s Gas department, said, “Soon, we are going to sign the MoU, and at that time we would discuss the price factor.”
