New Delhi: The general public is already struggling with the brunt of inflation. In such a situation, a new update is coming out regarding inflation. In fact, news agency PTI, quoting sources, said that the government along with the country's main oil marketing companies are planning to increase the prices of CNG (CNG Price Hike). However, no official announcement has been made on this yet.

How much will CNG cost

The government has cut the supply of natural gas to urban retailers by 20 percent. The effect of this cut can also be seen on oil prices. It is believed that due to this cut, the price of CNG may increase by 4 to 6 rupees per kg. However, according to sources, the government has also cut the excise duty on fuel prices.

supply is running low

The price of CNG is decided by the government. The supply of CNG has been decreasing for some time now, due to which urban gas retailers are also getting less supply. It is being said that the supply of natural gas is declining by 5 percent annually. Due to the decline in supply, the prices of CNG are decreasing.

Why will the price of CNG increase

There has been no change in the input of LPG provided through pipes to homes. There is no update on their prices yet. In such a situation, the question arises that why will the prices of CNG increase? The answer is that the demand for CNG has reduced significantly as compared to May 2023. While the demand for CNG was 90 percent in May 2023, it fell to 50.75 percent on 16 October 2024 this month. At the same time, the demand for CNG was 67.74 percent in September last month.

In such a situation, due to the decrease in demand and supply, oil companies have to import natural gas. Due to this also, CNG can become expensive by 4 to 6 rupees per kilogram. According to sources, till now oil companies have not demanded to increase the price of CNG. Oil companies and the Ministry of Petroleum and Natural Gas are looking for solutions to the fall in demand and supply of natural gas.

"The company gets domestic gas allocation to meet its CNG sales volume requirement at the government-determined price (currently USD 6.5 per million British thermal unit). Based on the communication received by the company from GAIL India Ltd (nodal agency for domestic gas allocation), it is informed that there has been a major reduction in domestic gas allocation from October 16, 2024," IGL said in a filing.