Natural Gas Price Hiked by 10 Per Cent, CNG And Electricity Rates Set to Go Up
Earnings of producers like Oil and Natural Gas Corp (ONGC) and Reliance Industries are set to get a boost by the hiked price of natural gas.
New Delhi, Sep 29: Prices of CNG and electricity are set to go up after the government announced a 10 per cent hike in the price of domestic natural gas on Friday. According to Oil Ministry's Petroleum Planning and Analysis Cell, the price of natural gas has been hiked to USD 3.36 per million British thermal unit (mmBtu) from October 1.
The government revises the price of natural gas after every six months, based on average rates in gas-surplus nations like the US, Russia and Canada. India imports half of its gas which costs more than double the domestic rate. The revised USD 3.36 per mmBtu rate will be the highest since October 2015 to March 2016 when USD 3.82 per mmBtu price was paid to domestic producers. Fuel Prices Hit New Highs in Mumbai, Petrol Close to Rs 91 Per Litre.
The government last hiked the price of natural gas to USD 3.06 per mmBtu for April-September 2018 from USD 2.89. This was just the second hike in nearly three years. Earnings of producers like Oil and Natural Gas Corp (ONGC) and Reliance Industries are set to get a boost by the hiked price of natural gas. However, the increase will lead to higher cost of CNG. Petrol, Diesel Price Rise Effect: Daily Use Products, Smartphones to Cost 5-8 Per Cent More as Fuel Rate Soars.
The increase will mean higher raw material cost for natural gas piped to households (PNG). It would also lead to higher cost of urea and power production. Indian gas prices are calculated by taking the weighted average price at Henry Hub of the US, National Balancing Point of the UK, rates in Alberta (Canada) and Russia with a lag of one quarter.
So, the rate for October 2018 to March 2019 is based on the average price at the international hubs during April 2017 to March 2018. (With PTI inputs)
(The above story first appeared on LatestLY on Sep 29, 2018 06:19 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).