Cooking Food, Driving CNG Vehicles To Get Cheaper As Centre Revises Gas Pricing Formula

NEW DELHI: A cap or ceiling price was set by the Union Cabinet along with a modification to the natural gas pricing methodology. Price reductions of up to 10% are anticipated for CNG and piped cooking gas as a result of this action. The prices of both PNG and CNG have increased by 80% as a result of a sudden surge in the global markets.

Anurag Thakur, the Union I&B Minister, told reporters following a cabinet meeting on Thursday that the APM gas, which is natural gas produced from legacy or old fields, will now be indexed to the price of imported crude oil rather than benchmarking it to gas prices in four surplus countries like the US, Canada, and Russia.

The price of this APM petrol will be 10% of the price of the basket of crude oil that India purchases (Indian basket of crude oil). In addition to the floor or base price of USD 4 per mmBtu, there will be a price cap of $ 6.5 per million British thermal units on the rate at which such arrivals are made.

The cost of CNG is anticipated to decrease from Rs 79.56 per kilogramme to Rs 73.59, and the cost of PNG is anticipated to decrease from Rs 53.59 per thousand cubic metres to Rs 47.59. CNG will cost Rs 79 per kg in Mumbai as opposed to Rs 87, while PNG would cost Rs 49 per 1,000 cubic metres as opposed to Rs 54.

The price of the Indian crude oil basket is currently USD 85 per barrel; 10% of that equates to USD 8.5; however, the cap would result in APM gas producers, ONGC, and Oil India Ltd. receiving only USD 6.5 per mmBtu.

The tariffs will rise by USD 0.25 per mmBtu each year when these ceilings and floors expire, the minister added.

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