Explainer: By how much your piped cooking gas bill will be reduced! – govt revised gas pricing formula cng and png to be 10 percent cheaper
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After the implementation of the new formula, the price of CNG and PNG in Delhi is expected to come down by Rs 6 per unit. Currently, the price of CNG in Delhi is Rs 79.56 per kg. After the new formula, its price may come down to Rs 73.59. Similarly, the price of PNG in the capital is Rs 55 per SCM (Standard Cubic Meter) which can be Rs 50 after the new formula. If someone’s two-month PNG bill has come to Rs 2,200, then it can be reduced to Rs 2,000. Consumers in Mumbai will save Rs 8 per unit on CNG, while PNG will save them Rs 5 per unit. CNG and PNG will now cost six rupees cheaper to customers in Bengaluru. Similarly, residents of other cities will also be benefited. But this benefit will vary on the basis of local tax or share of domestic gas. The price of gas will now be notified every month. PNG, CNG and fertilizer plants will benefit from this. This will benefit from common domestic consumer to farmers and vehicle drivers.
Benefit of both customer and producer
Oil Minister Hardeep Singh Puri said that there has been a huge increase in the prices of gas at the international level, but the government has taken several steps to save Indian consumers from its impact. He said that the purpose of the new guidelines is to keep the prices stable for domestic gas consumers. Along with this, the interests of gas producing companies have also been taken care of. This ceiling will be valid for two years and then it will be increased by 25% every year. According to the new formula, ONGC and Oil India will be given a 20 per cent premium for increasing production from legacy fields.
This formula will not apply to auctioned fields or difficult fields. Full freedom has already been given regarding pricing and marketing for the auctioned fields. A separate pricing regime was created in 2016 for Difficult Fields. The recommendations of the Kirti Parikh panel have been incorporated in the new formula. The panel was given the task of reviewing the pricing policy of Legacy Fields. The price of gas in the international market has increased by 70 to 80 percent in the last two years. Due to this, the price of CNG and PNG has increased significantly in the country.
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Domestic gas meets half the demand
Legacy fields refer to fields that were given to ONGC and Oil India before the introduction of the New Exploration Licensing Policy in 1997-98. This policy paved the way for auction of gas fields. Gas coming out of legacy fields is called APM gas (administered pricing mechanism). It is allotted by the government. Domestic gas meets 50% of the country’s total gas demand. The rest of the demand is met through LNG imported through ships.
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