CNG vehicles have come a long way and we remember the CNG price being Rs 15-17 a Kg in Delhi 12-15 years ago. But recently, these clean fuel costs skyrocketed. Compressed Natural Gas (CNG) has been a viable alternative to gasoline and diesel for quite some time now due to its lower environmental impact and more affordable maintenance costs.
To the relief of consumers in metros like Delhi and Mumbai, the price of CNG has dropped, making it more accessible to people in these cities as well as the National Capital Region (NCR). The newly announced pricing structure should make CNG more affordable for the general public. Many people have been struggling to make ends meet due to the recent spike in the price of fuel, so this is good news for many.
It is anticipated that the CNG Price in Delhi will fall from Rs 79.56 per kilogram to Rs 73.59, and that of PNG will fall from Rs 53.59 per thousand cubic meters to Rs 47.59. CNG will cost Rs 79 per kilogram instead of Rs 87, and PNG will cost Rs 49 per thousand cubic meters instead of Rs 54 in Mumbai.
The Indian basket of crude oil is currently priced at USD 85 per barrel, and 10% of that equates to USD 8.5 per barrel. However, the limit would result in APM gas producers, ONGC, and Oil India Ltd receiving only USD 6.5 per mmBtu. The petroleum minister stated that these ceiling and floor prices will be in effect for two years, after which rates will increase by $0.25 per mmBtu per year.
|CNG Price per State||CNG Price 10 April|
The modifications to the CNG Price formula are founded on the advice of a committee chaired by Kirit Parikh. While the committee’s recommendations regarding floor and ceiling and indexation have been accepted, the recommendations regarding annual increment and complete deregulation have been modified.
The panel suggested an annual increase of 50 cents per mmBtu in the USD 6.50 ceiling to achieve marketing and pricing freedom for APM domains gradually. Pankaj Jain, the Oil Secretary, responded to a question regarding deregulatory actions by stating that the cabinet has been informed of its decisions. In addition, rates will be fixed monthly, as opposed to the current biannual practice.
Currently, the government determines the prices of locally produced natural gas every six months. This gas is converted into compressed natural gas (CNG) for use in vehicles and piped into domestic kitchens for cooking, generating electricity and producing fertilizers.
Gas extracted from legacy or old fields owned by national oil companies such as Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL), as well as gas extracted from newer fields located in difficult-to-access areas such as the deep sea, both fall under the purview of separate formulas.