Cooking Food, Driving CNG Vehicles To Get Cheaper
- 07-Apr-2023
- 0 Comments
New Delhi: The Union Cabinet approved a revision in the formula for pricing of natural gas and imposed a cap or ceiling price. This move will likely help cut CNG and piped cooking gas prices by up to 10 per cent. A sudden spike in the international markets has resulted in an 80 per cent increase in the rates of both CNG and PNG.
The APM gas, which is natural gas produced from legacy or old fields, will now be indexed to the price of imported crude oil instead of benchmarking it to gas prices in four surplus nations such as the US, Canada, and Russia,
Anurag Thakur said that the ceiling price is lower than the current rate of USD 8.57 per mmBtu and would translate into a reduction in prices of piped cooking gas as well as CNG sold to automobiles.
This will lead to a 10 per cent cut in the piped cooking gas prices while CNG will see a little lower reduction, he said.
CNG price in Delhi is expected to be cut from Rs 79.56 per kg to Rs 73.59 and that of PNG from Rs 53.59 per thousand cubic meters to Rs 47.59. In Mumbai, CNG will cost Rs 79 per kg instead of Rs 87 and PNG will cost Rs 49 per thousand cubic meters instead of Rs 54.
These caps and floor prices will be for two years and rates will increase by USD 0.25 per mmBtu per year thereafter.
The changes in the gas pricing formula are based on the recommendations of a committee under Kirit Parikh.
While the committee’s recommendation for floor and ceiling as well as indexation has been accepted, the one on annual increment and full deregulation has been changed.
