UP braces for CNG shortage, price rise in wake of Russia-Ukraine conflict
LUCKNOW Uttar Pradesh is bracing for a shortage of CNG as the Russia-Ukraine war has started making an impact on natural gas supplies to the local market, which may also lead to a hike in prices of natural gas and crude oil, said officials.
The Gas Authority of India Ltd (GAIL) has already cut down 20% of CNG supply to 34 CNG pumps in Lucknow, 30 pumps in Agra, four in Ayodhya and three in Unnao. Filling stations in these cities are maintained by Green Gas Limited (GGL), while supply in Kanpur is maintained by Central UP Gas Limited (CUGL). GAIL officials didn’t rule out a rise in prices of CNG and crude oil.
“The Russia–Ukraine conflict can hit global CNG and other gas supply chains that are already stressed due to the pandemic. Everyone knows these countries are major players in the global market,” said JP Singh, MD, Green Gas Limited.
“If the war continues for a longer time, there is a possibility of more cuts in CNG supply. As a result, there is a possibility of some pumps getting shut down,” said GAIL.
Russia controls around 12% of the global crude oil production and 17% of natural gas production. If the war doesn’t stop soon, the gas shortage will get worse, impacting almost all industries/vehicles that are run on CNG and fertiliser companies fuelled by natural gas, said officials.
At present, Lucknow gets a daily CNG supply of 1.40-1.45 lakh kg per day while in Agra it is 1.10-1.15 lakh kg. But, after the 20% cut, the supply has come down to 1.25-1.30 lakh kg in Lucknow and 85,000-95000 kg in Agra. The demand for CNG is on the rise as employees are returning to office due to the dip in Covid cases, said Surya Prakash Gupta, chief marketing manager, GGL.
When approached for a comment, chief marketing manager of GAIL Manish Saxena said, “It’s an internal matter which can’t be revealed in public.”
However. he agreed that GAIL is facing pressure from companies for not cutting down supplies. He didn’t rule out rise in prices of CNG and PNG in the days to come as prices of gas had skyrocketed after the war.
“Global supply chains have been badly hit,” he admitted.
GGL officials said they suggested cutting the CNG quota of supply to fertilizer companies and industries instead of reducing supply to CNG pumps.
Lucknow has around 1.25 lakh CNG-run vehicles, Agra 1.10 lakh such vehicles and the number of CNG vehicles is increasing each day due to emphasis on eco-friendly transport system.
12 CNG stations shut in Kanpur
As many as 12 CNG stations have been shut in Kanpur due to shortage of gas supply to the city through pipeline from Gujarat. The rest 22 stations are just about managing supply for as long as they can in the current situation.
Officials of the Central UP Gas limited (CUGL) cited the Russia-Ukraine war as the reason for the shortage. As of now, the supply of piped natural gas (PNG) is unaffected in Kanpur, but there are apprehensions of a crisis, if the war continues.
Kanpur has 34 CNG stations supplying 1.25 lakh kg of gas every day to 73,000 CNG vehicles and factories. Officials said there is a spike in oil and gas prices due to the war. As a result, gas supply to CUGL has been cut down by 25%, which could further go up.
CUGL director Hirdesh Kumar said: “There has been a cutdown in the supply because of this war. We are closely monitoring the situation. If one area has three stations, supply should continue from at least one. PNG consumers will not face any problem.”
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