The cost of production of natural gas for national oil companies has risen since the last increase in 2005, Minister of State for Petroleum and Natural Gas Jitin Prasada said during Question Hour.
"ONGC and Oil India incurred Rs 4,745 crore of loss on sale of APM (administered priced) gas," he said.
The price was raised from just under USD 2 per million British thermal unit to USD 4.2 per mmBtu to bridge the difference in cost of production and sale price and also to provide level playing field with Reliance Industries, who sell natural gas from its eastern offshore KG-D6 field at USD 4.2 per mmBtu, he said.
The hike had necessitated an increase in CNG and piped natural gas price in Delhi and Mumbai.
"Following the APM price increase, Indraprastha Gas Ltd, which supplies CNG in and around Delhi, increased its CNG price in Delhi from Rs 21.90 per kg to Rs 27.50 per kg and Mahanagar Gas Ltd, which supplies CNG in and around Mumbai, increased its CNG price from Rs 24.65 per kg to Rs 31.47 per kg," he said.
VAT on gas varies from 5 per cent in Delhi to 12.5 per cent in Gujarat to 21 per cent Uttar Pradesh, he said.
Prasada said urea manufacturing units have been given top most priority in allocation of natural gas from KG-D6 fields of Reliance. Fertilizer units have been allocated 15.77 million standard cubic meters per day, power plants 32.677 mmscmd and LPG extraction units 3 mmscmd.
"Demand for gas is greater than supplies," he said.