New Delhi: Indraprastha Gas Limited (IGL) hiked CNG (compressed natural gas) prices by Rs 2.50 per kg in the capital and its neighbourhoods, the second hike in as many days, due to a two-fold increase in domestic natural gas price. . gas.
The latest hike has made CNG costlier by over Rs 9 per kg in six days, which is expected to trigger an uproar for higher fares from bus, auto, taxi and goods transport operators.
Expensive CNG in the NCR could also affect the prices of daily staples, especially vegetables, as these are brought in from Delhi’s neighborhood and distributed in the city in CNG vehicles.
The sharp rise in the price of domestic gas – from $2.9 to $6.10 per unit (Million British Thermal Units) – has forced CNG and PNG operators in cities such as Mumbai and Gujarat to raise retail prices, according to the Centre’s 2014 pricing formula . ,
Further increase in prices cannot be ruled out. People with knowledge of the matter said that there is still a gap of around Rs 7-8 per kg between the retail price of CNG and the cost of natural gas of IGL, raw material for CNG and PNG (Piped Natural Gas) services. For PNG the difference is estimated at Rs 3-4 per unit (standard cubic metre).
But all agreed that it would be impossible for IGL to pass the entire burden on to the consumers. This will put IGL in a dire situation due to the sharp increase in CNG sales.
Currently, domestic gas covers 70-80% of IGL’s CNG sales. The company is meeting the additional demand from imported gas from the spot market. This can cost anywhere between 3-4 times the domestic supply, especially since the Russia-Ukraine conflict has caused international prices to rise by about 40%. As demand picks up, the pressure for IGL will only get tougher.
After the latest hike, the price of CNG in Delhi will be Rs 69.11 per kg and in Noida, Greater Noida and Ghaziabad it will be Rs 71.67 per kg. The price in Muzaffarnagar, Meerut and Shamli will be Rs 76.34 per kg, while in Gurugram it will be Rs 77.44.