• Natural gas price hiked by 62 percent

    Natural gas price hiked by 62 percent

    New Delhi: The Central government hiked the price of Natural gas by 62 percent, after a two-year gap. Natural gas is primarily used for the purpose of producing electricity, makes fertilizers and turned into CNG to use it as fuel in automobiles and cooking gas for household kitchens.

    The last time the price of natural gas was hiked was in April 2019 and has since only fallen due to a drop in global benchmark rates.

    The surge in price is likely due to the result in a 10-11 percent rise in CNG and piped cooking gas rates in cities such as Delhi and Mumbai. It will also lead to a rise in the cost of generating electricity but consumers may not feel any major pinch as the share of power produced from gas is very low.

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    The oil ministry’s Petroleum Planning and Analysis Cell (PPAC) said the rates paid for gas produced from fields given to state-owned Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL) will be USD 2.90 per million British thermal units for the six-month period beginning April 1.

    Simultaneously, the price for gas produced from difficult fields such as deepsea, which is based on a different formula, was hiked to USD 6.13 per mmBtu from the current USD 3.62 per mmBtu.

    Natural gas price is set every six months — on April 1 and October 1 — each year based on rates prevalent in surplus nations such as the US, Canada and Russia in one year with a lag of one quarter.