After Mumbai, CNG prices cut in Delhi as well

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City gas distributor Indraprastha Gas Limited (IGL) has undertaken CNG price cut of Rs 2.5/kg in Delhi NCR, effective from 6 AM March 7, 2024. After fresh cut,  CNG will be sold in the national capital at Rs 74.09/kg. Earlier, the clean and green energy mobility fuel used to cost Rs 76.59/kg in the national capital. While, in Noida, Greater Noida and Ghaziabad, the cost will come down to Rs 78.70/kg. While, there has been no revision of Piped Natural Gas (PNG) prices in the national capital which remains at Rs 48.59/SCM.

Before IGL, state-run Mahanagar Gas Limited (MGL) had also reduced CNG prices in Mumbai by a similar margin.  Following which, the clean and green energy mobility fuel now costs Rs 73.50/kg. MGL also didn’t revise PNG prices, which remained to cost  Rs 47/SCM in the commercial capital of India. MGL had sighted dip in gas input costs behind the downward revision of CNG prices.

How much CNG prices reduced in Delhi  in last one year?

In Delhi, CNG prices have corrected by Rs 5.47/kg from Rs 79.56/kg in April 2023 to Rs 74.09/kg on 6 AM March 7, 2024.

It is expected that natural gas prices will continue to reduce across the nation in coming days owing to the change in method made by the Government of India to derive natural gas prices in the country.

What is the new method for pricing of CNG and PNG in the country?

Last year, the GoI changed the method used to derive CNG and PNG prices in the country.  Subsequently, the government has linked domestically produced natural gas prices to India’s crude oil basket. Plus, the determined prices will not be more than 10 per cent of that of the crude oil basket. Moreover, the government has also put a cap of 8.5 mmBtu  on price derived by use of the new method. mmBtu stands for metric million British Thermal Unit. It is a unit of measurement of natural gas. The change in method was expected to bring down the price of natural gas by 10 per cent in the country. Plus, prices will now be revised on monthly basis.

What was the old method?

Earlier, the natural gas prices in India were benchmarked with gas prices of four countries which were the US, Canada, Russia and Saudi Arabia. On basis of this, government authorities used to revise India prices every six months.

Because the government changed the price derivation method, even if natural gas prices rise globally in near future, CNG and PNG prices will not rise in India at least in near future.  The Information and Broadcasting Minister Anurag Thakur had earlier said the governmet’s decision to bring in the new method will translate to downward price revision of natural gas prices across the nation.