Mahanagar Gas Ltd (MGL) a subsidiary of GAIL India on Friday announced a reduction in the retail price of CNG by Rs 8 per kg and domestic PNG by Rs 5 per standard cubic meter (SCM) across its licenced area. This comes after the Centre revised the pricing methodology of domestically-produced natural gas on Thursday.
According to PTI, a late evening statement from the gas distributor said, "MGL is pleased to pass the benefit of the source price reduction in domestic gas cost onto its domestic PNG and CNG consumers. Accordingly, the price of CNG is reduced by Rs 8 per kg and domestic PNG is down by Rs 5 per SCM in and around Mumbai.”
In February, MGL reduced its CNG price by Rs 2.5 per kg however, the prices are still around 80 per cent more than those in April last.
According to the report, from April 7 at midnight, the retail price of CNG will be Rs 79 per kg and that of domestic PNG Rs 49 per SCM.
The company said with this reduction CNG is now 49 per cent cheaper than petrol and 16 per cent cheaper than diesel at current prices in Mumbai, while domestic PNG is 21 per cent cheaper than domestic LPG.
Also Read: Natural Gas Price For April At $7.92, Rate For Consumers Capped At $6.5: Govt
Earlier the Centre released the domestically produced gas price for the remainder of April, it has been fixed at $6.5 per mmBtu for ONGC and Oil India and at $7.92 for others.
The Petroleum Planning And Analysis Cell of the Oil Ministry in its order said that the price of natural gas from April 8 to April 30 comes to $7.92 per mmBtu (million British thermal units) going by the new indexation of pricing it at 10 per cent of the imported cost of crude oil. However, the Cabinet while changing the pricing formula capped the rates at $6.5 per mmBtu.
On Thursday, the Cabinet revised the gas pricing formula and capped the price of domestically produced CNG and piped cooking gas, at 10 per cent of international crude prices. The new formula was proposed by the Kirit Parikh panel.
Instead of benchmarking it to gas prices in four surplus countries—Oman, the US, Canada, and Russia—the new formula will apply to natural gas generated from legacy or old fields, also known as APM (administered price mechanism) gas, which will be adjusted to the price of imported oil.
The new ceiling price is lower than the current rate of $8.57 per mmBtu. It will reduce the prices of piped cooking gas as well as CNG by 10 per cent. Piped cooking gas prices will be cut by up to 10 per cent across cities while CNG will see a little lower reduction.