Following the increase in crude oil, global gas prices are expected to rise this year, putting consumers at risk of rising CNG and PNG prices in India.
According to the Gas Market Institutional Assessment (KEE), domestic gas prices are expected to double from the current 3.2 / million BTU level in 2HFY22 at 1HFY23E to 6.6-7.6 / million BTU.
We estimate a significant increase in domestic gas prices to 6.6-7.6 / mn BTU for 1HFY23E due to the recent sharp rise in global gas prices and forecasting significant future windings in the coming months.
Benchmark gas prices rose even more in September 2021: Henry House gas prices at 4.1 / mn BTU with $ 4.1 / mn BTU ($ 2.6 / mn BTU used at 2.HFY22 prices), and the British NBP to 4 15.4 / jump. mn BTU from 10.9 lbs / mn BTU in August (5.9 lb / mn BTU used for 2HFY22 prices).
In addition, Alberta Center gas prices also increased from 2.8 / mn BTU to $ 3.1 / mn BTU in August (used for 2HFY22 prices).
Last month, Asian LNG prices increased more than $ 16.7 / mn BTU and $ 22.8 / mn BTU.
High gas prices mean higher transportation costs for consumers. In September, CNG margins will be fixed, and a 5-7 / kg price increase will be needed to transfer gas prices.
IGL took a 30 percent increase in domestic gas production in 2HFY21 on August 30 to reduce the maximum LNG price for the CNG unit.
In order to influence the high domestic gas prices in 2HFY22, IGL and MGL will have to increase their prices by about 5-7 kg.