Saturday, July 20, 2024

Mahanagar Gas Limited reduces CNG price by ₹8 per kilogram

Mahanagar Gas Limited on 7 April decreased the price of compressed natural gas (CNG) by 8 per kilogram to 79 per kilogram. Apart from this, it also reduced the piped natural gas (PNG) price by 5/scm to 49/scm.

The move comes on the heels of the Centre revising the pricing methodology of domestically-produced natural gas on 6 April, which was proposed by the Kirit Parikh committee and following it with the new price announcement earlier in the day.

Earlier in February, the city gas distributor reduced its CNG price by 2.5/kg, however prices are still around 80 per cent more than those in April last.

ALSO READ: How revision in domestic gas pricing will reduce CNG and PNG prices- Explained

“MGL is pleased to pass the benefit of the source price reduction in domestic gas cost onto its domestic PNG and CNG consumers. Accordingly, the price of CNG is reduced by 8/kg and domestic PNG is down by 5/SCM in and around Mumbai,” a late evening statement from the city gas distributor said.

As per the new notice, the revised retail price of CNG will be 79/kg and that of domestic PNG 49/SCM effective from April 7 midnight.

CNG is 49 per cent cheaper than petrol and 16 per cent than diesel at current prices in Mumbai, while domestic PNG is 21 per cent cheaper than domestic LPG.

The Centre had set domestically produced gas price for April $6.5/ mmBtu for ONGC and Oil India and at $7.92 for others.

The Cabinet revised the gas pricing formula on Thursday, and capped the price of domestically produced CNG and piped cooking gas, which meet almost 70 per cent of supply, at 10 per cent of international crude prices.

The new formula will be applicable on natural gas produced from legacy or old fields, known as APM (administered price mechanism) gas, which will be indexed to the price of imported crude, instead of benchmarking it to gas prices in four surplus nations of Oman, the US, Canada and Russia.

Accordingly, APM gas will be priced at 10 per cent of the price of the India crude basket but the rate will be capped at$6.5/mmBtu. There will also be a floor or base price of $4/mmBtu.

The new ceiling price is lower than the current rate of $8.57/mmBtu and will translate into a reduction in prices of piped cooking gas as well as CNG sold to automobiles by 10 percent. Piped cooking gas prices will be cut by up to 10 percent across cities while CNG will see a little lower reduction, the government said.

With agency inputs. 

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