September 11, 2021 02:36 PM
CNG, piped cooking gas prices may jump 10-11% in Oct, and piped cooking gas prices in cities such as Delhi and Mumbai may be hiked by 10-11 per cent next month as the government-dictated gas price is set to rise by about 76 per cent, ICICI Securities said in a report.
The government, using rates prevalent in gas-surplus nations, fixes the price of natural gas produced by firms such as state-owned Oil and Natural Gas Corp (ONGC) from fields given to them on nomination basis, every six months. The next review is due on October 1.
The price, referred to as APM or administered rate, will rise to $3.15 per million British thermal unit (mmBtu) for the period from October 1, 2021 to March 31, 2022 from the current $1.79, the brokerage said. The rate for gas from deepwater fields such as KG-D6 of Reliance Industries Ltd and BP Plc would rise to $7.4 per mmBtu next month.
CNG, piped cooking gas prices may jump 10-11% in Oct, Natural gas is the raw material that is converted into compressed natural gas (CNG) for use in automobiles as fuel or piped to household kitchens for cooking purposes.
“The expected surge in APM gas prices would present a challenge to city gas distribution (CGD) players as it would mean a rise in their gas cost for CNG and residential piped natural gas,” it said. “APM gas price rise would mean hefty price hikes would have to be made by IGL (that retails CNG in national capital and adjoining cities) and MGL (which retail CNG in Mumbai) in the next one year.”
Going by the trend in international markets, the APM gas price is likely to rise to $5.93 per mm Btu in April 2022 to September 2022 and to $7.65 during October 2022 to March 2023. This would mean another 22-23 per cent hike in CNG and piped natural gas prices in April 2022 and 11-12 per cent in October 2022, it said.