Mumbai, Apr 7 (PTI) Gail India subsidiary Mahanagar Gas (MGL) on Friday announced a steep reduction in the retail price of compressed natural gas (CNG) by Rs 8/kg and domestic PNG (piped natural gas) by Rs 5/SCM across its licenced area.

The move comes on the heels of the Centre revising the pricing methodology of domestically-produced natural gas on Thursday as proposed by the Kirit Parikh committee and following it with the new price announcement earlier in the day.

Also Read | Online Fraud in Mumbai: 'Dubai-Based Maulana' Dupes Man of Rs 1.99 Lakh On Pretext of Helping Him Marry His Lover.

In February, the city gas distributor reduced its CNG price by Rs 2.5/kg. but prices are still around 80 per cent more than those in April last.

MGL is pleased to pass the benefit of the source price reduction in domestic gas cost onto its domestic PNG and CNG consumers. Accordingly, the price of CNG is reduced by Rs 8/kg and domestic PNG is down by Rs 5/SCM in and around Mumbai,” a late evening statement from the city gas distributor said.

Also Read | West Bengal Shocker: Trinamool Congress Leader Amod Ali Biswas Shot Dead in Broad Daylight in Hanskhali.

The revised retail price of CNG will be Rs 79/kg and that of domestic PNG Rs 49/SCM effective from April 7 midnight.

The company said with this CNG is 49 per cent cheaper than petrol and 16 per cent than diesel at current prices in Mumbai, while domestic PNG is 21 per cent cheaper than domestic LPG.

Earlier in day the Centre set domestically produced gas price for April USD6.5/ mmBtu for ONGC and Oil India and at USD7.92 for others.

In an order from petroleum planning and analysis cell, the price of natural gas for April 8-30 comes to USD 7.92/ mmBtu (million British thermal unit) going by the new indexation of pricing it at 10 percent of imported cost of crude oil. However, the Cabinet while changing the pricing formula capped the rates at USD 6.5/ mmBtu.

For the gas produced by ONGC and OIL from their nomination fields, the price shall be subject to ceiling of USD 6.5/mmBtu, the order said.

On Thursday, the Cabinet revised the gas pricing formula, as proposed by the Kirit Parikh panel, and capped the price of domestically produced CNG and piped cooking gas, which meet almost 70 per cent of supply, at 10 per cent of international crude prices.

The new formula will be applicable on natural gas produced from legacy or old fields, known as APM (administered price mechanism) gas, which will be indexed to the price of imported crude, instead of benchmarking it to gas prices in four surplus nations of Oman, the US, Canada and Russia.

Accordingly, APM gas will be priced at 10 per cent of the price of the India crude basket but the rate will be capped at USD 6.5/mmBtu. There will also be a floor or base price of USD 4/mmBtu.

The new ceiling price is lower than the current rate of USD 8.57/mmBtu and will translate into a reduction in prices of piped cooking gas as well as CNG sold to automobiles by 10 percent. Piped cooking gas prices will be cut by up to 10 percent across cities while CNG will see a little lower reduction, the government said.

(This is an unedited and auto-generated story from Syndicated News feed, LatestLY Staff may not have modified or edited the content body)