CNG, Piped Cooking Gas Receive Price Hike

The prices of CNG and cooking gas piped to household kitchens in Delhi on October 7, 2022 has received a price hike of Rs 3 in step with surge in input natural gas prices.

This latest price hike of 3 per kg in CNG price is the first hike in nearly 4 months while the Rs 3 per standard cubic metres surge in piped natural gas (PNG) is the first rise in 2 months.

CNG in the national capital territory of Delhi now costs Rs 78.61 per kg, up from Rs 75.61 per kg, according to the information posted on the website of Indraprastha Gas Ltd (IGL) - the firm which retails CNG and piped cooking gas in the national capital and adjoining cities, according to a PTI report.

It is worth noting that this is the 14th jump in price since March 7. Rates were last increased by Rs 2 per kg on May 21. In all, the CNG price has risen by Rs 22.60 per kg during this period. Since April 2021, CNG prices have increased by Rs 35.21 per kg or 80 per cent, according to data compiled by PTI.

Simultaneously, the rates of gas piped to household kitchens, called piped natural gas (PNG), was increased to Rs 53.59 per standard cubic metre in Delhi from Rs 50.59 per scm, according to IGL.

It is worth mentioning that this is the 10th raise in PNG rates since August 2021. In all prices have surged by Rs 29.93 per scm, or almost 91%.

IGL said rates of CNG and PNG have also been increased in Noida, Greater Noida, Ghaziabad and Gurugram as well as other cities where it operates such as Kanpur in Uttar Pradesh and Ajmer in Rajasthan, added the PTI report.

The latest price rise is on the line of government raising natural gas prices by 40 per cent to a record USD 8.57 per million British thermal unit from October 1.

Natural gas, which is extracted from below earth's surface, is converted to compressed natural gas (CNG) for running automobiles and piped to household kitchens for cooking. It is also used to generate electricity and manufacture fertilizer.

Mahanagar Gas Ltd (MGL) - the city gas operator in Mumbai and adjoining areas - earlier this week announced a Rs 6 per kg hike in CNG price to Rs 86 per kg and a Rs 4 per scm increase in PNG price to Rs 52.50 per scm.

Analysts anticipate that CNG prices are likely to be hiked by Rs 8-12 per kg and PNG rates by over Rs 6, but in tranches, to account for the rise in input natural gas prices. Natural gas prices are up nearly 5x in just a year - from USD 1.79 per mmBtu till September 2021 to USD 8.57 now, stated the PTI report.

For each USD per mmBtu gas price rise, city gas distribution (CGD) entities need to raise the CNG price by Rs 4.7-4.9 per kg.

Prices vary from city to city depending on the incidence of local taxes such as VAT.