In a move aimed at bringing transparency in pricing mechanism, the Petroleum Ministry has asked all the CNG (compressed natural gas) and PNG (piped natural gas) retailers to provide a break up of the fuel price to consumers to ensure that whatever benefits have been announced are passed on to the users.
Presently, no break-up of price of petroleum products including petrol, diesel, LPG or kerosene is provided to consumers. Orders in this connection have been issued by the Petroleum and Natural Gas Minister, Veerappa Moily.
Earlier this month the government had announced a steep price cut by Rs. 14.90 per kg in price of CNG and Rs. 5 per Kg reduction in rates of PNG in Delhi. The order by the Ministry comes following reports that retailers in some states were not passing on the cut in gas prices to the consumers.
Mr. Moily ordered all city gas distribution (CGD) firms to display break-up of CNG price at CNG stations as well as furnish the break-up of the price in invoice to the customer.
"The (CGD) entities would give following details in the break-up of CNG and PNG price: Cost of gas to the CGD entity, supply and distribution cost of CGD entity, company's margin, excise, VAT and any other tax," the Petroleum Ministry statement said.
All CGD companies have been asked to furnish the break-up of CNG and PNG price to the Ministry on annual basis by April 30 each year and the data for 2013-14 should be furnished by April 30, 2014.
The Ministry warned that non-compliance of the guidelines by CGD entities would lead to cancellation of their domestic gas allocation for CNG and PNG.
The order said the Petroleum Ministry was of the view that in order to ensure that the benefit of allocation of domestic gas to CGD entities is passed on to the end consumers and for transparency in pricing, the break-up of CNG and PNG prices need to be disclosed to the consumers.
The Ministry order was issued as a hike in CNG price looms from April.