The year 2013 has brought the news of costlier transportation in national capital. After a period of 6 months, IndraPrastha Gas Ltd (IGL), the key supplier of CNG, has revised CNG prices by 4%. Interestingly, since the start of 2012, CNG prices are up by 18%. At this rate, they beat average inflation by a wide margin.

Few years back, with the discovery of Reliance Industries' (RIL) KG DG basin, the domestic gas scenario looked brighter. The gas production from the field was initially forecasted to touch 80 million standard cubic metres per day (mscmd). However, since hitting a peak of 55 mscmd in August 2010, the gas supplies have been consistently falling. The decline has been steep with current production at around one fourth of the target. As such, more and more demand is now being met through the imported gas. Since imported gas is around three times costlier than the domestic gas, the CNG prices are on a rise. With the existing gas pricing policies in the country, there is hardly any incentive with the domestic oil and gas companies to produce gas. Unless the Government gets its act right, the