Indore: Piped gas no match to subsidised LPG

The piped natural gas (PNG) project is yet to catch people’s fancy in Indore because of switch-over fears and the liquid petroleum gas (LPG) still being a handy subsidised option.

At present, the piped gas connections are being provided by Avantika Gas Ltd (AGL), which is a joint venture of GAIL (India) Limited and Hindustan Petroleum Corporation Limited (HPCL).

The PNG project took off in December 2011 with a target of providing 5,000 connections by March 2012 and 1.20 lakh by 2016-17. But, so far only about 3,100 households have been put on the PNG connection.

The sources attribute many reasons to the slow pace of the project besides procedural delays. However, Avantika Gas Ltd (AGL) managing director Anil Kumar cites other reasons too.

He says, “One problem is that the price difference between the piped gas and the LPG is negligible. The other (problem) is that many people are reluctant to shell out the initial Rs 6,000 registration amount…”

Kumar says efforts are on to create awareness among the people about the advantages of a piped gas connection and the momentum, he says, has picked up in the past few months.

“In 2014-15, we have added 1,200 connections as against 1,900 connections until 2014,” he says. “There are many instances when one household has a connection but the neighbour is reluctant to get one,” he says.

At present, AGL has a 220-km pipeline network for supplying PNG in the city and will soon increase it to 400 km. After launching operations in Saket and South Tukoganj area, the company is now expanding to other locations, including Bhanwarkuan area, Pipliyahana and Nepania.

Sources say that subsidy on LPG cylinders is one of the main reasons that is preventing piped gas from becoming a cheaper option.

The company is also trying to allay fears that the supply might be affected at a future date when the connection spreads to more households in the city. The company has a capacity for supplying 12 lakh SCM (standard cubic metre) of gas per day and can easily cover the whole city, as a single household needs an average of 0.5 SCM daily.

“We took piped gas connection three years ago and have not faced any problems so far. There was only one instance when the main pipeline had burst due to road construction work in nearby area but the supply was restored quickly,” Raju Shelgaonkar, a resident of Ram Bagh area says.

The piped gas prices in Indore start from Rs 22 per SCM (standard cubic metre) and vary according to the consumption. Company officials say a family that consumes one LPG cylinder per month will consume piped gas of about Rs 410 to Rs 430 (including VAT). The price of a subsidised LPG cylinder in Indore is Rs 460 so the piped gas consumer will end up saving some money.

The Union government has set 1 lakh connection as the company’s target in next two years. But, a consultant says that it will take the company about five years to achieve the target.