Natural Gas Price Surge: Impact on CNG and Cooking

The price of natural gas used for CNG and cooking rose by 5% amid an oil price surge following Israel's military action against Iran. The government's Petroleum Planning and Analysis Cell noted the price hike comes amid global fluctuations and is capped to minimize domestic impact.

The monthly revision raised the cost of gas from state-run legacy fields to USD 6.75 per million British thermal units, up from USD 6.41. This ceiling price affects the production costs for city gas retailers, who may pass on the hike to consumers through increased CNG pricing.

This change follows a new pricing formula implemented in April 2023, tying APM gas prices to crude oil averages, adjusted with a floor and ceiling cap. Despite the higher cap for 2025-26, international events have pushed prices to their limits, compressing margins for producers and distributors.

(With inputs from agencies.)