Gas price hike may force
NTPC to up tariff 5%
INTRO: Since it accounts for 24% of gas-based generation and gets 63% gas under APM
Neeraj Thakur. New Delhi
With the proposed hike of 33% in the price of natural gas being sold under administered price mechanism (APM), power companies have started to calculate how much increase in fuel cost would they need to pass on to customers.
NTPC accounts for around 24% of India's total gas-based power generation and gets 63% of gas under the APM route.
The ministry of petroleum and natural gas wants the APM gas prices to be increased to $2.4 mmBtu from the current $1.83 mBtu.
NTPC's average realisation in the last fiscal was Rs 2.12 per unit.
"Our calculation projects an increase of around 5% in power tariff if NTPC's cost of fuel goes up by 33% for gas-based power plants. The company will also have to factor in the recent increase in the coal prices by Coal India Ltd," said Rupesh Sankhe, analyst with Angel Broking.
The total installed capacity of NTPC is 30,644 mw out of which nearly 4,000 mw is generated through gas-based power plants.
The company requires 14 mmscmd of gas of which nearly 8.8 mmscmd is supplied by Gas Authority India Ltd (GAIL) under the APM route.
NTPC recently sought permission from Central Electricity Regulatory Commission (CERC) to increase power tariff after Coal India Ltd increased the prices of coal by 11% recently.
"Any hike in fuel prices will force the company to pass on increased cost to customers. NTPC, like all other companies, can increase the power tariff, if they want to," said Pramod Deo, chairman of CERC.
NTPC chairman R S Sharma could not be contacted for comments.



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