Gail Gas, the city gas distribution arm of India's largest gas distributor state-controlled Gail, has reduced its domestic piped natural gas (PNG) and compressed natural gas (CNG) prices in line with the government's revised pricing mechanism.
Gail Gas has cut PNG prices by 7 rupees/m³ ($0.09/m³) in the city of Bengaluru and district of Dakshina Kannada in Karnataka state to Rs51.50/ m³. It cut PNG prices in other cities in the states of Uttar Pradesh, Haryana, Madhya Pradesh, Rajasthan, Jharkhand and Odisha by Rs6/m³ to Rs52.50/m³.
The firm reduced CNG prices by Rs7/kg in Karnataka and Haryana, with prices in Bengaluru and Dakshin Kannada at Rs82.50/kg, while prices in the Sonipat region of Haryana at Rs85/kg. CNG prices in Meerut, Uttar Pradesh were cut by Rs7/kg to Rs85/kg.
Gail Gas also reduced CNG prices in other regions by Rs6/kg. Prices are at Rs92/kg in Madhya Pradesh's Dewas city, Rajasthan's Taj Trapezium zone and in Uttarakhand's capital of Dehradun; at Rs87/kg in Uttar Pradesh's Mirzapur city; and at Rs91/kg for Madhya Pradesh's Raisen town, Jharkhand's cities of Dhanbad and Adityapur, and for Puri and Rourkela in Odisha state, following the reductions.
These prices are effective from 9 April, Gail Gas said earlier this week.
The cuts follow the government's approval for a revised natural gas pricing mechanism late last week. Delhi has set a floor price for conventional gas from state-controlled ONGC and Oil India's older fields at $4/mn Btu, as well as a ceiling price at $6.50/mn Btu. These are aimed at keeping natural gas prices in the domestic market in check, lowering the government's fertilizer subsidy burden and helping the domestic power sector.
The new pricing mechanism is seen aiding the expansion of CNG and PNG as preferred fuels in the Indian market, Gail Gas said.
Fellow Gail subsidiary Mahanagar Gas (MGL) has reduced the price of its PNG by Rs5/m³ to Rs49/m³ in Mumbai, making it 21pc cheaper than a 14.2kg LPG cylinder that costs Rs1,102.50. MGL has also cut its CNG price by Rs8/kg to Rs79/kg, making CNG 49pc cheaper than gasoline and 16pc cheaper than diesel in Mumbai.
Gail holds a 49.75pc stake in MGL in a joint venture with British Gas.
The government aims to make India a gas-based economy, with the share of natural gas in its primary energy mix targeted to rise to 15pc by 2030 from around 6pc in 2022. It also aims to expand domestic gas consumption as it tries to move away from more polluting fuels like coal, in its efforts to cut carbon emissions by 1bn t by 2030 from 2005 levels, progressing towards net zero emissions by 2070.
