New Delhi: The rates of CNG and piped cooking gas will be reduced by up to 10% according to a modification to the natural gas pricing formula that the Union Cabinet approved on Thursday.
Instead of being benchmarked to the gas pricing in four surplus countries like the US, Canada, and Russia, natural gas produced from legacy or old fields, known as APM gas, would now be indexed to the price of imported crude oil, according to Union I&B Minister Anurag Thakur.
APM gas will be priced at 10 per cent of the price of the basket of crude oil that India imports (Indian basket of crude oil). The rate such arrived at however will be capped at USD 6.5 per million British thermal unit. There will also be a floor or base price of USD 4 per mmBtu.
The ceiling price is lower than the current rate of USD 8.57 per mmBtu and would translate into a reduction in prices of piped cooking gas as well as CNG sold to automobiles, he said.
Piped cooking gas prices will be cut by up to 10 per cent across cities while CNG will see a little lower reduction, he said.
Rates of piped cooking gas, called PNG, and CNG have jumped 80 per cent in one year to August 2022. This follows a spurt in international energy prices.
Following the decision, the CNG price in Delhi will be cut from Rs 79.56 per kg to Rs 73.59 and that of PNG from Rs 53.59 per thousand cubic meters to Rs 47.59. In Mumbai, CNG will cost Rs 79 per kg instead of Rs 87 and PNG will cost Rs 49 per scm instead of Rs 54.
With PTI inputs