CNG, PNG price cut in Gujarat

Gandhinagar

Government of Gujarat today announced price cut in compressed natural gas(CNG) and piped natural gas(PNG) by Gujarat Gas Company Ltd.

According to Minister Saurabh Patel, the State owned company has reduced PNG prices by Rs 2.77/standard cubic meter and CNG prices by 90 paisa/kg.

New prices are effective from midnight.

Highlights:

49% of India’s total PNG home consumers and 36% of India’s total CNG stations are in Gujarat.

Consumers will get direct benifit worth Rs 375 crore with today’s reduction in gas prices.

PNG(Home users) price is down Rs 26.35 to Rs 23.58 per unit.

Price of CNG per Kg with taxes is down from Rs 45.65 to Rs 44.75.

Thus PNG has been cheaper by Rs 2.77 per scm while CNG by 90 paisa per Kg.

More than 10.70 lakh home consumers and 1.65 lakh daily users across 241 CNG stations will get benefit of today’s announcement.

For commercial consumers PNG(Industrial MGO) price per unit with tax is down from Rs 31.62 to Rs 29.10, while PNG(Industrial Non-MGO) price per unit is down from Rs 34.50 to Rs 33.93. PNG(Commercial) per unit price is down from Rs 50.60 to Rs 46.

Benefit in commercial sector will go to 2,894 small and medium scale industrial consumers and 11,900 commercial consumers.

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CNG and piped cooking gas prices across the country are poised to fall after natural gas rates were on Thursday cut by a steep 20 per cent, the third reduction in last one year.

Price of natural gas produced from existing fields of state-owned ONGC and Reliance Industries has been cut to USD 3.06 per million British thermal unit with effect from today.

Gas price on gross calorific value (GCV) currently is USD 3.82 per mmBtu.

On a net-calorific value (CV) basis, the gas price will be USD 3.4 per mBtu as compared to USD 4.24 currently.

As per the new gas pricing formula approved by the NDA-government in October 2014, gas prices are to be revised every six months and the next change was due on April 1.

The reduction in natural gas prices would mean lower raw material cost for compressed natural gas (CNG) and natural gas piped to households (PNG) and would translate into reduction in retail prices.

Government also announced the cap price based on alternate fuels for undeveloped gas finds in difficult areas like deepsea which are unviable to develop as per the existing pricing formula.

Earlier last month the Cabinet approved marketing and pricing freedom for all undeveloped discoveries lying in difficult areas subject to a cap. The cap for April 1 to September 30 will be USD 6.61 per mmBtu on GCV basis and USD 7.3 on NCV basis.

This is the third and the steepest reduction in natural gas prices which will dent the revenue of state-owned Oil and Natural Gas Corp (ONGC) by Rs 4,300 crore on an annual basis.

ONGC is the country’s biggest gas producer, accounting for some 60 per cent of the 90 million standard cubic meters per day current output.

All of its gas as well as that of Oil India Ltd and private sector RIL’s KG-D6 block are sold at the formula approved in October 2014. This formula however does not cover gas from fields like Panna/Mukta and Tapti in western offshore and Ravva in Bay of Bengal.

– With inputs from agency