CNG price down by Rs 6/kg, PNG by Rs 3.50 in Mumbai following VAT cut to 3%

The city gas utility Mahanagar Gas on Thursday announced a steep reduction in the retail price of CNG by Rs 6 per kg and piped gas by Rs 3.50 per scm, effective Friday, even as the Centre more than doubled the price of domestically-produced natural gas earlier in the day.

In a statement on Thursday, MGL said consequent to the reduction in VAT on natural gas from 13.5 per cent to 3 per cent from April 1 by the state government, MGL has decided to pass on the entire benefit to end-consumers.

Accordingly, the retail price of compressed natural gas (CNG) is cut by Rs 6 to Rs 60 per kg and domestic piped natural gas (PNG) by Rs 3.50 to Rs 36/scm in and around Mumbai effective Friday, it said.

When asked for a reaction to the price hike by the Centre for the producers, an MGL spokesperson told PTI that the company will evaluate the impact of the massive increase in supply prices in the due course of time and revise its retail prices accordingly.

Earlier in the day, the Centre more than doubled the price of domestically produced natural gas for the six months beginning April 1 on the back of a spike in global energy rates and the move will immensely benefit the likes of Reliance, ONGC and Oil India.

Accordingly, the price of gas from regulated fields of state-owned ONGC and Oil India will rise to a record USD6.10 per million British thermal units (mmBtu) from USD 2.90 per mmBtu now, according to a notification issued by the oil ministry's Petroleum Planning and Analysis Cell.

The rate paid for difficult fields like deepwater will rise to USD 9.92 per mmBtu for April-September from USD 6.13 per mmBtu, it said.