Rising natural gas prices will make CNG-PNG 10 to 11 per cent more expensive

(PTI) New delhi date. 20

The government has hiked natural gas prices by 3 per cent. Natural gas is used in the production of electricity, fertilizer, cooking gas and CNG. Natural gas prices have been hiked for the first time since April 2016. The decision to increase the price of natural gas has been taken due to the rise in crude and gas prices in the international market. LNG prices have not risen despite rising crude prices in the last two weeks.

The Petroleum Planning and Analysis Cell (PPAC) of the Oil Ministry has said that માંથી 2.50 per million thermal units will be paid for gas produced from Oil and Natural Gas Corporation (ONGC) and Oil India Limited (Oil). Earlier, the price was 1.2.

In addition, gas generated from other difficult fields will be paid ૩ 2.15 per million thermal units. The previous price of this gas was ૬૨ 4.5. Reliance Industries and its partner BP, which produces gas from deep seas like KG-D3, will be entitled to a maximum price of 2.15.

The hike in natural gas prices is likely to increase the price of CNG and cooking gas piped to Delhi and Mumbai by 10 to 11 per cent. The cost of power generation will also increase but it is unlikely to have a major impact on consumers as the rate of power generation from gas is low. LPG cylinder prices are also likely to go up by Rs 50 to Rs 100 soon due to rising international crude and gas prices.

The last time natural gas prices were reviewed was in April this year. At that time, the price of natural gas remained unchanged at ૭૯ 1.6. The price of deep-sea gas was cut from ૬ 4.05 to ૬૨ 4.5.

It may be mentioned that if the price of gas is increased by ૧ 1, ONGC's annual revenue will increase by Rs 200 crore. After deducting taxes and other charges, the company gains between Rs 500 crore and Rs 700 crore.

Gas prices were last hiked in April 2016. Natural gas prices did not rise as crude prices fell internationally.