CNG rates jump Rs 9 in 6 days in NCR after 2 consecutive price hikes

NEW DELHI: Indraprastha Gas Ltd (IGL) raised CNG (compressed natural gas) prices in the Capital and its neighbourhood by Rs 2.50 per kg, the second increase in as many days, because of a two-fold rise in the price of domestic natural gas.
The latest increase has made CNG costlier by more than Rs 9 per kg in six days, which is expected to set off a clamour for higher fares from bus, auto, taxi and goods transport operators.
Costlier CNG in NCR could also impact the prices of daily staples, especially vegetables as these are brought in from Delhi’s neighbourhood and distributed in the city in CNG vehicles.
The sharp rise in domestic gas price — from $2.9 to $6.10 per unit (million British thermal unit) — in accordance with the Centre’s 2014 pricing formula has also forced CNG and PNG operators in cities such as Mumbai and Gujarat to jack up retail prices.
Further increase in prices cannot be ruled out. People aware of the matter said there is still a gap of about Rs 7-8 per kg between the retail price of CNG and IGL’s cost of natural gas, the raw material for CNG and PNG (piped natural gas) services. The gap for PNG is estimated at Rs 3-4 on each unit (standard cubic meters).
But all agreed that it will be impossible for IGL to pass on the entire burden to consumers. This will put IGL in a piquant situation because of a sharp uptick in CNG sales.
Currently, domestic gas covers 70-80% of IGL’s CNG sales. The company is meeting additional demand with imported gas from the spot market. This can cost anywhere between 3-4 times the domestic supplies, especially since international prices have gone up by near-40% due to the Russia-Ukraine conflict. As demand rises further, the squeeze will get harder for IGL.
After the latest increase, CNG in Delhi will cost Rs 69.11 per kg and in Noida, Greater Noida and Ghaziabad Rs 71.67 a kg. The costs in Muzaffarnagar, Meerut and Shamli will be Rs 76.34 per kg, while in Gurugram it will be Rs77.44.

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