CNG price hiked by Rs 4 per kg; domestic gas consumers spared

New Delhi: Citing a steep hike of 110 per cent in the cost of natural gas supplies, city gas distributor MGL on Friday increased the retail price of automobile fuel CNG by Rs 4 per kg but left the rate of cooking gas unchanged.

This is the third hike in the price of Compressed Natural Gas (CNG) since April 6.

MGL said CNG will now cost Rs 76 a kg in and around Mumbai effective from this midnight. However, there will be no increase in the domestic PNG price.

With the latest increase, CNG prices are up by Rs 16 per kg since they came down by Rs 6 a kg between April 1 and 5. The rates were reduced after the state government had cut the VAT (Value Added Tax) to 3 per cent from 13.5 per cent.

The central government, on April 1, announced a 110 per cent increase in the supply price of gas from regulated fields of state-owned ONGC and Oil India to a record USD 6.10 per million British thermal units (mmBtu) from USD 2.90.

Natural gas when compressed becomes CNG for use as fuel in automobiles. The same gas is also piped to household kitchens and industries for cooking and other purposes.

The state-owned Mahanagar Gas Limited (MGL) also cited the historically high cost of re-gasified LNG, which is being blended to offset the shortfall in the availability of gas for CNG and domestic piped natural gas, as the reason for the third consecutive increase in the retail prices.

The combination of price rises have resulted in the significant increase in the cost of gas being procured by MGL, it said in a statement on Friday, adding that the progressively price increase is the only way to recover such increased gas cost.

Even at the revised price, CNG is cheaper by 57 per cent and 27 per cent compared to those of petrol and diesel, respectively, MGL said.

On April 6, MGL had increased the prices of CNG and PNG by Rs 7 and Rs 5 per kg, respectively. Again on April 12, the rates were increased by Rs 5 a kg for CNG and by Rs 4.50/SCM for domestic piped natural gas.