Natural gas prices hiked by 40% to record levels; CNG, PNG to cost more
The Hindu
This will be the third increase in rates since April 2019 and comes on the back of firming benchmark international prices
Prices of natural gas, which is used to generate electricity, make fertiliser and is converted into CNG to run automobiles, were on Friday hiked by a steep 40% to record levels, in step with global firming up of energy rates.
The rate paid for gas produced from old fields, which make up for about two-thirds of all gas produced in the country, was hiked to $8.57 per million British thermal units from the current $6.1, according to an order from the Oil Ministry's Petroleum Planning and Analysis Cell (PPAC).
Explained | Why natural gas prices are soaring
Simultaneously, the price of gas from difficult and newer fields like the ones in Reliance Industries Ltd and its partner bp plc operated deepsea D6 block in KG basin, was hiked to $12.6 per mmBtu from $9.92, the order said.
These are the highest rates for administered/regulated fields (like ONGC's Bassein field off the Mumbai coast) and free-market areas (such as the KG basin).
Also, this will be the third increase in rates since April 2019 and comes on the back of firming benchmark international prices.
Gas is an input for making fertiliser as well as generating electricity. It is also converted into CNG and piped to household kitchens for cooking purposes. A steep increase in prices is likely to reflect in higher rates for CNG and piped natural gas (PNG), which has in the last one year risen by over 70%.
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