NEW DELHI: CNG and PNG will now become cheaper by 10 percent as per the decision taken by the cabinet on Thursday. Natural gas produced by legacy old fields will now be linked to crude oil prices instead of gas prices with a cap 24% lower than the current rate, snapping the linkage in the international markets that has resulted in a drastic hike in the rates of CNG and PNG.
Union Minister for Information and Broadcasting Anurag Thakur addressed a press conference after the cabinet meeting and said monthly notifications will be implemented to ensure stable pricing in the regime and offer adequate protection to producers against adverse market fluctuations.
The APM gas, which is natural gas produced from legacy or old fields, will now be indexed to the price of imported crude oil instead of benchmarking it to gas prices in four surplus nations such as the US, Canada, and Russia, Union I&B Minister Anurag Thakur told reporters after a meeting of the cabinet. This move will make PNG cheaper by 10 percent and CNG by 6 percent to 9 percent. The rate arrived at however will be capped at USD 6.5 per million British thermal unit. There will also be a floor or base price of USD 4 per mmBtu.
The ceiling price is lower than the current rate of USD 8.57 per mmBtu and would translate into a reduction in prices of piped cooking gas as well as CNG sold to automobiles, he said.