Home / Industry / Energy /  City gas distribution firms hike CNG, PNG prices to offset costs

MUMBAI : While natural gas prices have stayed benign due to the covid-19 crisis, city gas distribution companies have revised rates citing higher minimum wages, rising operating expenses and commission payments to oil marketing companies.

In Mumbai, Mahanagar Gas Ltd (MGL) on 9 February raised compressed natural gas (CNG) price by 1.50 a kg, and domestic piped natural gas (PNG) prices by 95 paise per unit. The move will impact 750,000 autos, taxis and buses plying in Mumbai, and over 700,000 households which use piped gas for cooking.

“The hike has been done in order to partially cover the increase in operational, manpower and fixed costs experienced during the pandemic," an MGL spokesperson said.

Indian liquified natural gas (LNG) imports rose 1% year-on-year in December, but declined 7% month-on-month to 2.1 million metric tonnes. Overall natural gas consumption for the month fell 3% year-on-year and 4% month-on-month to 165.7mmscmd (million metric standard cubic metres per day). In Q3FY21, LNG imports rose 10% y-o-y and 2% q-o-q to 97.3mmscmd.

“CNG and residential PNG price was raised from 8 February 2021, despite no rise in domestic gas cost," said ICICI Securities in a report dated 9 February.

City gas distribution firms enjoy the highest priority allocation of domestic natural gas from the government for PNG and CNG consumers.

According to MGL, while minimum wages have gone up, operating expenditure on a per-unit basis sold increased from 4.70-4.90 (pre-covid) to 5.50- 5.70.

Indraprastha Gas Ltd did not reply to an emailed query till press time.

The increase in CNG price comes at a time when retail fuel prices have been climbing for seven consecutive days to touch new highs. While retail petrol price in Delhi was raised by 26 paise to 88.99 a litre, in Mumbai it was retailing at 95.46 per litre. Diesel price in Delhi was at 79.35, up 29 paise from Sunday while in Mumbai, it was 86.34 per litre.

However, despite the price revision, CNG will be 62% cheaper compared to petrol and 41% cheaper to diesel at current levels in Mumbai, MGL said.

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