CNG Price HIKE ALERT! Prices in Delhi, Mumbai could increase by 10-11% in October, gas prices by around 76%: Report

In cities such as Delhi and Mumbai, CNG and pipeline gas prices are set to rise by 10-11 percent next month, as government-mandated gas prices are expected to increase by about 76 percent, ICICI Securities reports.

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The government adjusts the price of natural gas produced by state-owned companies such as Oil and Natural Gas Corporation (ONCCC) every six months using the expanded rates in gas-profit countries. The next review is on October 1st.

The price, also known as the APM or manageable rate, will increase from $ 1.79 to $ 3.15 per million UKM from October 1, 2021 to March 31, 2022, the broker said.

Exhaust gas from deep water fields such as RGiance Industries Ltd and BP Plc will increase by $ 7.4 per mmBtu next month.

Natural gas is a raw material that is converted into compressed natural gas (CNG) in cars as fuel or for cooking purposes.

“The expected increase in APM gas prices will increase the price of natural gas for CNG and residential pipelines, which will be a challenge for urban gas distribution (CGD) players,” he said. The increase in APM gas prices means a significant increase in price by IGL (CNG in National Capital and Neighboring Cities) and MGL (Mumbai Retail CNG) in the next year.

“Urban Gas Distributors (CGDs) should” increase prices by 10-11 percent in October, “ICICI Securities said in a report.

In the face of global market trends, APM gas prices could rise to $ 5.93 per mmBtu in April 2022 and September 2022 and $ 7.65 in October 2022 and March 2023.

This would mean another 22-23 percent increase in CNG and natural gas prices in April 2022 and 11-12 percent in October 2022.

MGL and IGL are expected to increase prices by 49-53 percent between October 2021 and October 2022, with the price of AM1 gas rising from $ 1.79 per mmBtu to H2FY23E at $ 7.65 per mmBtu.

“CGD players may be able to make the much-needed price hikes from competing fuels, gasoline and diesel.

The rise in gas prices will help boost OGC and Oil India Limited as well as private companies such as Reliance Industries Ltd (RIL).

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