Prices of CNG, piped cooking gas hiked by Rs 3 as natural gas prices rise

The prices of CNG and cooking gas piped to household kitchens in the national capital on Saturday hiked by Rs 3 each in step with rise in input natural gas prices.

The Rs 3 per kg increase in CNG price is the first hike in rates in over four months, while a Rs 3 per standard cubic metres increase in piped natural gas (PNG) was the first raise in two 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.

This is the 14th increase 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 the 10th increase in PNG rates since August 2021. In all prices have gone up by Rs 29.93 per scm, or almost 91 per cent.

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.

The price increase follows the 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.

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.