Price of CNG might increase by up to Rs 11 from April 2014

Compressed Natural Gas (CNG) prices might increase by Rs 8-11 from April 2014, as per decision taken by the Government of India to double price of Natural Gas. Increasing price of natural gas will directly impact the price of CNG, which is nothing but a compressed form of natural gas.

cng price hikeThe increase in price of natural gas will come into effect next April, as per decision taken by Govt. officials at the end of June 2013. As per the announcement, price will be increased from USD 4.2 per million British Thermal Unit (mmbtu) to USD 8.4 mmbtu. The new USD 8.4 mmbtu price will then be reviewed every three months and will be applicable to gas producers and state owned firms which include Oil India Limited, Oil and Natural Gas Corporation and Reliance Industries Limited.

Speaking about the increase in natural gas price, Panabaaka Lakshmi, Minister of State for Petroleum and Natural Gas  said, “If it is presumed that the city gas distribution entity is operating entirely on domestic gas, the impact of USD 1 per mmBtu increase in price of domestic gas would result in a price hike of Rs 2.93 per kg of CNG.”

This increase will result in a price hike of Rs 2.93 per kg of CNG. This will mean that post April 2014, CNG prices in the city of Mumbai will equate to Rs.11.72 per kg increase while in Delhi the increase will be in the region of Rs.8.2 per kg, as revealed by PTI. Current prices of CNG in Mumbai stands at Rs.35.95 per kg while in Delhi it is priced at Rs.41.90 per kg. This natural gas price hike has been approved by the Government of India, based on the Rangarajan Committee recommendations and will be applicable from April 1, 2014 for a period of 5 years.