CNG and PNG Price Hike : CNG and PNG prices witnesses an exponential rise

The Petroleum Ministry has stopped fresh allocation of natural gas from domestic fields (fields) to city gas distributors (CGDs). With this, the prices of CNG and PNG (LPG supplied to households through pipes) have reached record levels. The ministry, however, said the allocation has not been stopped and supplying more gas to the sector will result in cuts in supplies for sectors such as power and fertilisers. With this move of the government, questions have been raised on the investment plan of two lakh crore rupees for expansion in new cities.

The high prices of CNG have brought the cost of this cheap alternative to vehicle fuel closer to that of petrol and diesel. In such a situation, it is no longer beneficial for consumers to convert their vehicles to a cleaner fuel option.

Despite the Union Cabinet's decision to supply 100 per cent gas to the urban gas distribution sector on priority basis without 'cut', the supply to the sector is being done on the basis of the demand level as of March, 2021. This has forced the city gas distribution companies to purchase imported LNG at a higher price, leading to gas shortages and a jump in prices.