The government on Thursday hiked the price of natural gas, which converts to CNG, used for cooking in homes and used as fuel in automobiles, by 62 per cent.
Industry sources said CNG and piped LPG rates are likely to increase by 10-11 per cent in cities like Delhi and Mumbai due to increase in gas prices.
This will also increase the cost of power generation, but consumers will not feel any major inconvenience as the share of electricity generated from gas is very less.
This is the first rate hike since April 2019 and comes on the back of a firming up of benchmark international prices, but does not reflect the spot or current price rally of liquefied natural gas (LNG) seen over the past few weeks.
The petroleum planning and analysis cell (PPAC) of the petroleum ministry said the rates paid to state-owned Oil and Natural Gas Corporation (ONGC) and Oil India Limited (OIL) for gas produced from the given fields are $2.90 per million. British Thermal Unit (MMBTU). ) for a period of six months commencing from 1st October, 2021.
Simultaneously, the price of gas produced from difficult areas such as the deep sea, which is based on a different formula, was raised to $6.13 per mmBtu from the current $3.62 per mmBtu.
Gas prices were last raised in April 2019 and have since fallen due to a fall in global benchmark rates.
The price of natural gas is determined every six months – on April 1 and October 1 – with an interval of one quarter to a year based on rates prevailing in surplus countries such as the US, Canada and Russia.