CNG price likely to increase by Rs 4 to 6

The government has reduced the supply of cheap domestic natural gas to urban retailers by 20 percent. According to sources, if the excise duty on this fuel is not reduced, then the price of CNG used in vehicles may increase by Rs 4 to 6 per kg.

At present, the government imposes 14 percent excise duty on CNG, according to which one kg of CNG is charged Rs 14 to 15.

According to sources, the price of produce from old areas is controlled by the government. It is used by city gas retailers. The production of these areas is declining by five percent annually.

Due to this reason the production of urban gas distribution companies has reduced. Sources said the gas supplied for cooking is safe. The government has reduced the supply of raw materials for CNG.

In May 2023, the gas coming out of the gas fields met 90 percent of the demand for CNG and it is continuously declining. He said that since October 16, the supply has been cut to reduce the demand for CNG to only 50.75 per cent from 67.74 per cent in the previous month.

The city's gas retailers are having to buy imported and expensive LNG to compensate for the shortfall. Due to which the price of CNG is likely to increase by four to six rupees per kilogram.

Gas from old fields is priced at $6.50 per million British thermal units (MMBtu) while imported LNG is priced at $11-12 per MMBtu.