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Within a month, city gas distributor Mahanagar Gas (MGL) has announced the second price hike of Rs 6 per kilogram for CNG and by Rs 4 a unit for piped natural gas with immediate effect.
The price revision comes amidst rising prices of the natural gas at source both internationally as well as for domestically drilled gas. Rising prices have forced suppliers and distributors to cut down on industrial supplies since the past many weeks.
This is the sixth price hike since April this year.
“Due to the significant increase in input gas cost, we have decided to recover the cost. Accordingly, we’ve increased the retail price of CNG (Compressed Natural Gas) to Rs 86 (per kilogram) and domestic PNG (Piped Natural Gas) by Rs 4/SCM (standard cubic meter) to Rs 52.50 in and around Mumbai, effective from this midnight,” MGL said in a statement.
The utility said the price hike is to meet the shortfall in domestic gas allocation, as it forced to source additional market-priced natural gas to cater to the increasing requirement of CNG and PNG.
The last increase was effected on July 12 when the state-run utility hiked the retail price of CNG by Rs 6 per kilogram and PNG by Rs 3/SCM.
The Centre had increased the price of domestic and imported natural gas by over 110 per cent from April 1. This had completely offset the steep price reduction announced by the state by way of slashing VAT on these fuels to 3.5 per cent from 13.5 per cent from April 1.
Despite liberalising the energy sector, the government still controls both price and supply of natural gas to a large extent and prices and supply allocation is decided in advance twice a year. The April 1 hike is valid till end-September and the next revision will be announced from October 1.
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