NEW DELHI: As the government fixed natural gas price at $6.5 per mmBtu on Friday for April 2023 under the new pricing formula, distribution companies have started reducing the price of CNG and PNG. Companies such as Mahanagar Gas Limited (MGL), Adani Total Gas Ltd (ATGL), and Torrent Gas have announced a substantial reduction in price of compressed natural gas (CNG), which is used as transport fuel and piped natural gas (PNG), used for domestic purposes.
According to the price notification, Adani's total gas, which supplies gas in Gujarat, cut price up to Rs 8.13/kg on CNG and Rs 5.06/scm on PNG. It also reduced PNG prices for its industrial and commercial consumers by Rs 3.0/scm in its Geographical Areas (GAs). Similarly, Mahanagar Gas Limited (MGL), announced a reduction of CNG price by Rs 8 per kg to Rs 79 per kg and PNG price by Rs 5/scm to Rs 49/scm.
Torrent Gas, which supplies in 34 districts across the country including the cities of Chennai and Jaipur, today announced slashing price up to Rs 8.25 per Kg on CNG and Rs 5 per SCM on PNG. Meanwhile, the CNG and PNG prices were cut by up to Rs 6 by Indraprastha Gas in Delhi
The move comes after the government revised gas pricing formula on Thursday that came into effect from Saturday (April 8, 2023). As per the new pricing norms, gas price will be determined based on the previous months’ average crude price basket, but with a floor and ceiling price of $4/mmBtu and $6.5/mmBtu, respectively. On Friday (7 April 2023), the petroleum ministry announced the natural gas price of $7.92 per unit for April 2023, but as per new price formula, the same was capped at $6.5 per unit.
Subsequently, the gas companies have started reducing CNG and PNG prices in the country. “It is enhancing the affordability of PNG and CNG with a saving of over 40% for CNG consumers as compared to petrol prices and around 15% for home PNG consumers as compared to LPG prices,” said Adani Total Gas in a statement.
The government said the purpose of the new pricing norm will increase the share of natural gas in the energy mix from current 6.5% to 15% by 2030. It believes the reforms will help expand the consumption of natural gas and contribute to achieving the target of emission reduction.