Govt doubles gas price to record levels; CNG rates may go up

The new price, which is likely to result in a hike in CNG and piped cooking gas rates, will be for six months beginning April 1

The government on March 31 more than doubled the price of natural gas that is used to produce electricity, make fertilisers, turned into CNG, and piped to household kitchens for cooking, on the back of a spike in global energy prices.

The price of gas produced from old, regulated fields, such as the nation's largest gas field of Bassein of ONGC, will rise to a record high of $6.10 per million British thermal units (mmBtu) from the current $2.90 per mmBtu, according to the oil ministry's Petroleum Planning and Analysis Cell (PPAC).

The new price, which is likely to result in a hike in CNG and piped cooking gas rates, will be for six months beginning April 1. Petrol and diesel prices have been raised nine times in the last 10 days, totalling ₹6.4 per litre while cooking gas LPG rates too have gone up by ₹50 per cylinder. The latest gas price hike will further fuel inflation.

The rate applicable to newer and difficult fields such as ones of Reliance Industries Ltd in the deep-sea KG-D6 block will get $9.92 per mmBtu for April-September as compared to the current $6.13 per mmBtu, the PPAC notification said.

These are the highest prices ever paid to Indian gas producers.

The government sets the price of gas every six months— on April 1 and October 1— each year based on rates prevalent in gas surplus nations such as the U.S., Canada, and Russia.