CNG prices may increase (file photo)
A common man buys a CNG car instead of petrol or diesel thinking that at least this way he will reduce his fuel expenses. But due to the rise in CNG prices in recent times, this hope has become a hope of sorts. Now the government has taken a decision due to which the common man may be more affected by inflation and CNG prices may increase. This increase can be Rs 5 to Rs 5.50 per kg.
In fact, the government has reduced the supply quota of urban gas distribution companies that sell CNG for vehicles. Currently, these companies obtain a fixed quota in the supply of cheap domestic gas, of which the government has reduced by up to a fifth. In such a situation, the dependence of these companies on expensive CNG gas imported from abroad will increase and ultimately the burden of increased cost will be recovered from the customers.
The decision may be postponed until the elections in Maharashtra and Jharkhand.
However, CNG distribution companies are expected to postpone the decision to increase gas prices until the elections in Maharashtra and Jharkhand are over. If this happens, then you can be satisfied that you will not have to face the burden of inflation during festivals like Diwali.
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Indraprastha Gas Limited (IGL), a company that sells CNG in Delhi-NCR, and Mahanagar Gas Limited, a company that distributes CNG in areas like Mumbai, have informed the stock exchange that the supply of domestically produced gas has been cut off. This gas was available to them at half the price of imported gas.
GAIL reduced gas supply
IGL says the company gets CNG supply at the government’s fixed price, i.e. $6.5 per MBTU. This supply of domestic gas is given to cover the quantity sold. But according to the information received from the nodal agency GAIL (India) Limited, since October 16 there has been a significant reduction in the quantity of domestic gas supplied to the company. According to IGL, the supply of cheap domestic gas has decreased by approximately 21 percent.
Mahanagar Gas Limited (MGL) also says that the supply of cheap domestic gas has now reduced by 20 per cent. To cover this shortage, the company is considering many options. It is said that to compensate for the shortage of cheap gas, companies will have to buy expensive imported gas. Due to this, CNG prices may increase in the market.
CNG may become more expensive by Rs 5.50
Girish Kadam, vice-president of rating agency ICRA, says the 20 per cent reduction in the allocation of cheap gas to city gas distribution companies will have to be offset by more expensive imported LNG. If gas companies want to maintain their current profits and margins, they may have to increase the price of CNG from Rs 5 to Rs 5.50 per kg.
