CNG Price: If you get the news of CNG becoming expensive in the coming days, then along with being surprised, also know the reason behind it. The central government has reduced the supply of cheap domestic CNG to urban retailers by up to 20 percent. After this, the price of domestically produced CNG may increase by four to six rupees per kilogram.
The government has cut the supply to retail sellers from October 16 itself. Under this, the total demand of CNG was reduced to only 50.75 percent which was 67.74 percent last month. This means that the government has reduced the supply of natural gas to retailers. There is a possibility of increase in gas prices due to less supply.
Why will urban retail gas prices increase?
Sources said that the prices of production from old fields are controlled by the government and these are used. Annual production from these places is decreasing by five percent. Due to this, the supply of urban gas distribution companies has been cut. Retail buyers of natural gas will be forced to buy imported and expensive LNG to compensate for this shortage, which may lead to an increase of CNG prices by Rs 4-6 per kg.
There is a huge difference in the prices of imported gas
The price of gas from old fields is US $ 6.50 per million British thermal units (MMBTU), while the price of imported LNG is at $ 11-12 per unit. In May 2023, 90 percent of the demand for CNG was being met by the gas found in old areas, but it is continuously declining. Sources said that the gas supplied for cooking in homes is reserved, so the government has cut the supply of raw material for CNG.
What are the options before the government to save CNG from becoming expensive?
Information has been received quoting sources that at present the retail gas sellers have not increased the rates of CNG, because at present they are in talks with the Ministry of Petroleum and Natural Gas to find some other way for this. Sources say that if excise duty on fuel is not reduced, then after the government’s decision, common customers may have to bear the burden.
One option is that the government can cut the excise duty on CNG. At present the central government charges 14 percent excise duty on CNG, if we look at it in rupee terms then it works out to Rs 14-15 per kilogram. If this is reduced, retail gas sellers will not have to pass the burden of increased costs on to customers.
If CNG becomes expensive then there should be no shock before the elections –
Elections are to be held in Maharashtra next month and elections are also to be held in Delhi soon and Delhi-Mumbai are among the largest CNG markets in the country. If the government makes arrangements for CNG to become expensive at such a time, then it can become a big issue.
Input also from PTI
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