According to a report by ICICI Securities, CNG and piped LPG prices in cities like Delhi and Mumbai may increase by 10-11 per cent next month as the gas price fixed by the government may increase by about 76 per cent. Is. The government prices natural gas produced by firms such as state-owned Oil and Natural Gas Corp (ONGC) from fields assigned to them on a nomination basis every six months, based on rates issued in gas-surplus countries. The following review by the government will be on October 1.
CNG and LPG Prices May Increase in October
The brokerage house said the price, called the APM or administered rate, will be USD 3.15 per million British thermal units (mmBtu) from October 1, 2021, to March 31, 2022, from the current $1.79. Gas rates from deepwater fields such as Reliance Industries Ltd’s KG-D6 and BP Plc will increase to $7.4 per mmBtu next month.
Natural gas is the raw material converted into compressed natural gas (CNG) for use in automobiles as fuel or piped into home kitchens for cooking purposes.
The expected jump in APM gas prices will present a challenge to City Gas Distribution (CGD). This is because their gas cost for CNG and residential piped natural gas will increase. The increase in APM gas prices will mean a steep hike in prices by IGL (which retails CNG in the national capital and adjoining cities) and MGL (which retails CNG in Mumbai) over the next year.
ICICI Securities said that city gas distributors (CGDs) would have to hike prices by 10-11 per cent in October. As per the trend in the international markets, the APM gas price is likely to be US$ 5.93 per mmBtu from April 2022 to September 2022 and US$ 7.65 from October 2022 to March 2023. This means that CNG and piped natural gas prices will increase by 22-23 per cent in April 2022 and 11-12 per cent in October 2022.