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Crores of people in India may soon get a shock as CNG may become expensive in the country. Industry sources aware of the matter told CNBC-TV18 that India's city gas distributors, Mahanagar Gas Limited, Indraprastha Gas Limited and other companies may increase prices after reducing their gas allocation by 20 percent through Administered Price Mechanism (APM). Know today how much the price of CNG can increase.
CNG can be so expensive
Sources said city gas distributors believe that CNG prices may increase by up to Rs 6 per kg. For the reduced APM Gas Allocation, losses are likely to be incurred from spot LNG, which is currently priced between $11 and $12 per million metric British thermal unit (mmbtu), while APM gas is priced at $6.5 per mmbtu. Now it is up to the companies to decide whether the full impact of the higher purchase cost can be passed on to them. The APM gas allocation mix is now seen at 49 per cent to 50 per cent from 69 per cent to 70 per cent earlier. APM gas allocation has been cut due to natural decline in production and higher stake allocated to ONGC Petro Addition Limited (OPaL). Decline in shares of companies IGL shares (IGL Share Price) are now trading at Rs 510.95, down 1.47 per cent. Mahanagar Gas shares (Mahanagar Gas Share Price) are trading down 1.47 percent at Rs 1,760.40, while Gujarat Gas shares (Gujarat Gas Share Price) are down 2.23 percent at Rs 573.25.
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