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Domestic natural gas price has been hiked by 62% to $2.90 for October 2021 to March 2022 period
Brace up! Your power and gas bills are set to rise. The government last week raised the prices of natural gas by a huge 62%. This is the first hike since April 2019 when the price was at $1.79 per mmBtu (Metric Million British Thermal Unit).
The upward price revision is in line with the expectation of a 60 – 70% hike and comes on the back of rise in global gas prices.
Natural gas prices are determined biannually, on 1 April and 1 October, and follow the rates in surplus countries like as the United States, Canada, and Russia. Starting October 1, these new prices will be in effect for six months.
What are its implications ?
CNG prices hiked
CNG prices in the national capital were increased by Rs 2.28 per kg and piped cooking gas supplied to households were also raised by Rs 2.10 following this natural gas price hike.
As per Indraprastha Gas statement, this increase would have a marginal impact on the per km running cost of vehicles. It also said that with the revised price, CNG would still offer over 60% savings towards the running cost when compared to vehicles running on alternate fuels at the current level of prices
How will it impact consumers?
Natural gas is used to produce electricity. It is also converted into CNG for the use of fuel in automobiles and cooking gas for kitchens. This is therefore likely to raise the cost of generating electricity, thereby causing inflated power and fuel bills.
However, experts believe that consumers may not feel too much pinch as it will not lead to a significant increase in bills. This is because gas-fired electricity accounts for only a small percentage of total electricity generation.