In what may inflate the domestic cooking gas and CNG bills, the government on Friday hiked the natural gas prices by nearly 10 per cent for the next six month period, Reuters reported citing unidentified sources. The rates have been revised upwards for April-September at $3.69 per million metric British thermal units (mmBtu) compared with the last six months, the report added.
The prices were fixed at $3.36 per mmBtu earlier by the Modi government. The rates for the same time period for difficult fields have been capped at 9.3 per mmBtu against 7.67 per mmBtu, Reuters report also said.
The move is expected to affect consumers leading to rise in the prices of CNG (compressed natural gas) used as auto fuel, and PNG (piped natural gas) used in households as cooking gas.
A rise in rates of the domestic natural gas may o lead to a uptick in wholesale price index (WPI) inflation, which gives 0.46 per cent weightage to the natural gas of the total 2.46 per cent weightage given to crude petroleum and natural gas, a recent CARE Ratings report had said.
The New Domestic Gas policy, 2014, suggests revising natural gas prices every six months by the government. An official announcement is expected to be made by the government latest in the day, the report noted. The hike may result in the higher earnings for government-run Oil and Natural Gas Corp and Oil India.
New Domestic Gas price formula takes into account the prices of natural gas in USA (Henry Hub), UK (New Balancing Point), Canada (Alberta Gas) and Russia (Russian Natural Gas), where prices are market linked in each hub.
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