Transportation sector welcomes new Gas pricing guidelines

New Delhi,April 7, 2023: The government has approved a new method to fix the price of natural gas in India, which will result in a decrease in the cost of piped natural gas (PNG) and compressed natural gas (CNG). The revised domestic natural gas pricing guidelines will apply to gas produced from nomination fields of ONGC/OIL, New Exploration Licensing Policy (NELP) blocks and pre-NELP blocks, where the government has the power to approve prices. Natural gas produced from legacy or old fields will now be indexed to crude oil price instead of pricing it based on gas prices in surplus nations such as the US, Canada and Russia. The price of such natural gas shall be 10 per cent of the monthly average of Indian Crude Basket and shall be notified on a monthly basis. This move will make PNG or cooking gas cheaper by 10 per cent and lower the cost of CNG by 6-9 per cent, which will bring down the price of CNG by Rs 5-8 a kg in various parts of the country and that of PNG by Rs 5-6.5 per SCM (standard cubic metre). The new guidelines are intended to ensure a stable pricing regime for domestic gas consumers while at the same time provide adequate protection to producers from adverse market fluctuation with incentives for enhancing production.

Welcoming the new Gas pricing guidelines, Mr Vinod Aggarwal, President, SIAM and MD & CEO CECV said “Realignment of the Gas Pricing mechanism by insulating the Indian consumers from the spikes in Global prices will soften prices in India and will provide much needed relief to the Transportation sector. This measure will also help in re-igniting interest in CNG vehicles in India and would go a long way in promoting a clean Alternative fuel in various parts of the country. Incentivising greater production of Natural Gas will result in reduction in import dependence of conventional fuels, thereby enabling expansion of CNG infrastructure across the country and facilitating wider availability of CNG for vehicles.”