City gas companies need to boost CNG adoption: IGL MD
City gas companies will have to shift their focus away from profit margins to sales volume to accelerate the CNG vehicle adoption and overall consumption of natural gas in the country, said Kamal Kishore Chatiwal, managing director, Indraprastha Gas (IGL).
In an interview to ET, he said the government should evaluate subsidising piped natural gas (PNG) supplies for poor households to preserve its competitiveness with LPG, which is attracting expanding subsidies in different states ahead of upcoming polls.
«There is a scope for city gas distributors to reduce CNG prices and focus on volumes for faster penetration of gas in the country,» said Chatiwal.
CNG prices should not be as high as they are in some areas, he said, adding that in some licensed areas CNG prices are close to diesel prices.
«There are two advantages associated with CNG — environmental and economic. Until the economic benefit is realised by the people, they won't convert to CNG,» said Chatiwal.
About 15-17,000 vehicles convert to CNG every month in the areas IGL operates in.
«IGL's philosophy has been to focus on volumes,» said Chatiwal, adding that higher volume ensures increased revenue and higher profit even if the margins shrink a bit.
The government allocates cheaper domestic gas to city gas companies, which compress it and sell it to CNG vehicle drivers at market price. City gas players' fat margins have triggered a debate on whether CNG prices should be capped.
«I don't have the power to fix (CNG) prices.
