Gujarat Gas Hikes CNG Prices Yet Again, Fueling Outrage

Ahmedabad : Ahmedabad – Gujarat Gas Company Limited, a subsidiary of the Gujarat State Petroleum Corporation (GSPC), has announced yet another price hike of ₹1.50 per kg for Compressed Natural Gas (CNG), effective January 1, 2025. This marks the fourth price increase within a year, with vehicle owners now paying ₹79.26 per kg, up from ₹77.76 just 30 days ago.

The move has sparked widespread discontent among the state’s 22 lakh CNG vehicle owners, who have already borne the brunt of multiple price hikes. The company had previously raised prices by ₹1 per kg on July 24 and August 1, followed by ₹1.50 on December 1. In just six months, the cumulative increase has reached ₹5 per kg, significantly impacting household budgets and commercial operations.

Rising Costs Amid Reduced Gas Supply

Gujarat Gas attributes this latest hike to a sharp reduction in the central government’s supply of affordable domestic gas. According to industry sources, the supply of cheap gas has been slashed by up to 50%, forcing gas distribution companies to procure costlier alternatives priced between $9 and $10 per unit, compared to $6.50 previously.

“As winter demand surges, the shortage of domestic APM gas has intensified, leaving companies no choice but to pass on the increased costs to consumers,” said an oil and gas industry expert.

The hike disproportionately affects South Gujarat, home to 6 lakh CNG vehicles, including auto rickshaws and private cars. Across the state, 12 lakh vehicles run on CNG, including public transport and commercial vehicles. The state’s largest City Gas Distribution (CGD) company, Gujarat Gas operates 820 CNG stations across 44 districts.

Economic and Political Implications

The timing of the price hike has drawn criticism, coming just ahead of Gujarat’s local body elections. Opposition leaders argue that the move underscores the government’s insensitivity to rising inflation.

Darshan Naik, General Secretary of Gujarat Congress, criticized the company’s profit-driven approach. “Despite posting a net profit of ₹308.74 crore in September 2024, Gujarat Gas has burdened customers with relentless price hikes. Instead of capitalizing on profits to offer relief, they are exploiting consumers,” Naik said.

Indeed, Gujarat Gas reported consolidated net sales of ₹3,781.75 crore in September 2024, compared to ₹3,845.40 crore a year earlier. However, quarterly profits rose by 4.22% year-on-year, from ₹296.25 crore in September 2023 to ₹308.74 crore in September 2024. Profits for the March 2024 quarter also surged by 25.6%, reaching ₹409.5 crore.

Impact on Daily Life

The steep price hike adds financial pressure on commercial and personal vehicle owners alike. Auto-rickshaw drivers, school buses, and delivery vehicles are among the hardest hit, with increased operational costs likely to trickle down to consumers.

“It’s becoming impossible to sustain our livelihoods,” said Rajesh Parmar, an auto-rickshaw driver from Surat. “Every month, the price goes up, but our earnings remain stagnant.”

With 185 CNG stations in South Gujarat and 221 in Saurashtra, the company’s reach ensures that the price hike impacts every corner of the state.

Consumer advocacy groups and local activists have called for immediate intervention to regulate frequent price hikes. They argue that unchecked increases not only strain household budgets but also erode public trust in government policies aimed at curbing inflation.