Since Monday midnight, Mahanagar Gas Limited (MGL) has increased the retail prices of compressed natural gas (CNG) and piped natural gas (PNG) in and around Mumbai by 6/kg and 4/SCM, respectively. Domestic PNG will cost 52.50/SCM, according to a statement from MGL, while the new retail price of CNG would be 86/kg.
MGL cited the sharp increase in retail pricing and supply reduction to the government's 40% increase in input prices, which went into effect on October 1. The government adjusts gas prices twice a year, from October 1 to March 31 and from April 1 to September 30.
Therefore, the price for the period of October 1 to March 31 is based on the average price between July 2021 and June 2022. With the increase, the price difference between CNG and petrol has decreased to 45%, while that between PNG and LPG has decreased to just 11%.
On September 30, the petroleum pricing & analysis division of the energy ministry released new rates for the six months beginning on October 1; domestically produced gas prices saw a sharp 40% spike. The same had been raised by a considerably greater 110 percent on April 1, citing growing global prices.
MGL claimed that in addition to raising costs, the government had also decreased its allotment of gas to MGL by 10%, forcing MGL to purchase gas from the market at a significantly greater cost. The rupee's decline was mentioned as another justification for the increase. In response to skyrocketing worldwide gas costs, the government increased natural gas rates on September 30 by 40% to record highs.
The price paid for gas generated from old fields, which accounts for almost two-thirds of the country's total gas production, was increased from the previous USD 6.1 per million British thermal units to USD 8.57.
From April 1, the cost of gas from old fields—which is primarily produced by state-owned companies like ONGC and Oil India—was more than quadrupled to USD 6.1 per mmBtu. Similar to this, starting on April 1, the prices paid for gas from challenging fields like Reliance's deep-ocean KG-D6 increased to USD 9.92 per mmBtu from USD 6.13 per mmBtu.
