India’s gas companies hike CNG, PNG prices again

Indraprastha Gas (IGL) and Mahanagar Gas (MGL) have continued to hike the price of compressed natural gas (CNG) and piped natural gas (PNG) to recover the increased input costs after the government doubled the domestic natural gas price on April 1. Natural gas is used as a raw material to produce CNG and PNG.

IGL hiked the price of CNG by Rs 2.5 per kg to Rs 71.61 per kg, while the price of PNG was raised by Rs 4.25 per standard cubic meter (SCM). PNG will now cost Rs 45.86 per unit, up Rs 13.50/kg since January.

MGL, that distributes CNG and PNG in and around Mumbai, also hiked the prices effective from April 13 by Rs 5/kg for CNG to Rs 72/kg and for PNG by Rs 4.5/SCM to Rs 45.50/SCM.

MGL, in a statement, said that apart from 110% hike in domestic gas price to $6.1/mmBtu, the cost of re-gasified LNG — blended to offset the shortfall in availability of domestic gas — are at historically high levels. This combination has resulted in a significant increase in the cost of gas being procured by MGL.

“Since the increase in input gas price is significantly high, MGL has decided to progressively recover such increased gas cost.” Maharashtra government had cut the VAT on fuel from 13% to 3% on March 31.

Traditionally, CNG and PNG have helped people to alternatively save on petrol, diesel and LPG. However, the continuous hike in prices have reduced the benefits for CNG consumers to 59% on petrol and 31% on diesel at current petrol-diesel price levels.

In comparison, CNG prices on August 30 were Rs 45.20/kg and PNG at Rs 30.91/SCM.

On March 31, MGL had announced a reduction in retail price of CNG by Rs 6/kg and piped gas by Rs 3.50/SCM, effective April 1 after Maharashtra government cut VAT on the fuel from 13.5% to 3%. IGL has raised CNG prices by Rs 9/kg since April 1, taking the cumulative hike since January to Rs 16/kg.

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