City gas utility Mahanagar Gas has increased the retail price of compressed natural gas (CNG) and piped natural gas (PNG) by Rs 6 per kg and Rs 4 per scm respectively in and around the metropolis with effect from Monday midnight.
Accordingly, the revised retail price of CNG will be Rs 86 per kg and that of domestic PNG at Rs 52.50 per scm, MGL said in a statement on Monday evening.
The state-run company attributed the 40 per cent hike in input prices from October 1 by the government to a sharp increase in retail prices along with supply cuts.
The Petroleum Pricing and Analysis Cell of the oil ministry on September 30 announced new prices for the next six months from October 1, with a massive 40 per cent hike in the prices of domestically produced gas. In April 1, it was raised to 110 per cent, citing rising international prices.
The government revises gas prices twice a year – from April 1 to September 30 and from October 1 to March 31. Therefore, the price from October 1 to March 31 is based on the average price from July 2021 to June 2022.
Apart from the hike in prices, the government has also reduced the allocation of gas to MGL by 10 per cent, which requires MGL to source at a much higher cost than the market, MGL said. It also cited the depreciation of the rupee as another reason for the rise.
With the increase, the savings in prices between CNG and petrol have now come down to 45 per cent, while that of PNG and LPG have come down to just 11 per cent. On 30 September, the government hiked natural gas prices by 40 per cent to a record low, citing a rise in global prices.
The rate paid for gas produced from old fields, which accounts for about two-thirds of all gas produced in the country, was increased from the current USD 6.1 to USD 8.57 per million British thermal units. Simultaneously, the price of gas from tough and new fields like Reliance Industries and BP-operated Deepsea D6 block in KG basin was raised from US$ 9.92 to US$ 12.6 per mmBtu.
These are the highest rates for administered/regulated areas (like ONGC’s basin area on Mumbai coast) and free market areas (like KG basin). Also, this will be the third increase in rates since April 2019 and is on the back of firming up of international prices. The price of piped natural gas has risen by more than 70 per cent last year.
The price of gas from old fields, which mainly belong to state-owned producers such as ONGC and Oil India, had more than doubled to USD 6.1 per mmBtu since April 1. Similarly, rates paid for gas from difficult areas like deep sea KG- Reliance’s D6 rose to US$ 9.92 per mmBtu from US$ 6.13 per mmBtu from April 1 onwards.