Virendra Pandit
New Delhi: With the Union Cabinet approving new guidelines on gas pricing on Thursday, Gail India and Adani Total Gas Ltd (ATGL) reduced the prices of Compressed Natural Gas (CNG) and Piped Natural Gas (PNG) with effect from midnight of April 8 and 9.
ATGL slashed the CNG price by Rs 8.13 per kg, and that of PNG by Rs 5.06 per standard cubic meter (SCM).
The price revision came after the Union Cabinet on Thursday approved the new guidelines on gas pricing, which paves the way for natural gas prices in India to be linked to global crude prices.
In a statement, ATGL said it welcomed the Centre’s decision to link the Administered Price Mechanism (APM) price for gas supply to CNG vehicles and residential households to 10 percent of the Indian crude basket with a floor of USD 4 and a ceiling of USD 6.5 per Metric Million British Thermal Unit (MMBTU).
“In line with our policy to prioritize our end consumers, ATGL has decided to pass through the benefit of the New Gas Pricing guidelines announced by the Government of India to the large numbers of Home PNG and CNG consumers, thus enhancing the affordability of PNG and CNG with a saving of over 40 percent for CNG consumers as compared to petrol prices and around 15 percent for Home PNG consumers as compared to LPG prices,” the statement read.
“Effective midnight tonight, ATGL is pleased to announce a reduction in the price of CNG up to Rs 8.13 per kg and the price of PNG up to Rs 5.06 per scm.”
The reduction in prices comes after the Centre’s approval of the recommendations of the Kirit Parikh-led Committee on gas pricing mechanism for domestically-produced gas. It proposed a floor price of USD 4 per MMBTU and a ceiling price of USD 6.5 for natural gas produced by the State-run explorers under the old APM fields. The mechanism of pricing is believed to reduce the cost of CNG, and PNG for city gas distribution (CGD) players.
Union Minister Anurag Thakur told reporters after the Cabinet meeting that natural gas produced from legacy or old fields, known as APM gas, will now be indexed to crude oil price instead of pricing it based on gas prices in surplus nations such as the US, Canada, and Russia.
“Rates will be decided every month instead of the current practice of bi-annual revision,” he said.
ATGL also reduced the PNG prices by Rs. 3 per scm for its industrial and commercial consumers in Ahmedabad, Vadodara, Faridabad, Khurja, and Palwal.
“ATGL believes that this landmark decision of reforming gas prices by the government shall act as a growth catalyst to enhance the footprint of Home PNG and CNG vehicles in a rapid manner to ensure an increase in the share of natural gas from 6.5 percent to 15 percent in India’s energy basket by 2030,” it added.
The reduction in gas prices will benefit ATGL’s about 7 lakhs domestic PNG users, 4,000 commercial users, about 2,000 industrial customers, and over 3 lakh CNG users across 460 CNG stations in India.
On Friday, Mahanagar Gas, a Gail India subsidiary, also announced a slash in the retail price of CNG by Rs 8 per kg and domestic PNG by Rs 5 per scm across its licensed area.