ICICI Securities said in a report that the government may increase the price of gas by about 76 percent in October. With the increase in the price of gas, CNG and PNG will become expensive.
Next month the common man is going to get another shock of inflation. In cities like Delhi and Mumbai, the prices of CNG and piped cooking gas (PNG) may increase by 10-11 per cent next month. ICICI Securities said in a report that the government may increase the price of gas by about 76 percent in October. The increase in the price of gas will make driving and cooking more expensive.
Let us tell you that under the new Domestic Gas Policy 2014, the prices of natural gas are fixed every six months. This formula is based on foreign prices. The next review will be on October 1. After October, gas prices will be fixed in April 2022.
gas price will increase so much
The brokerage said the price, called the APM or Administered Rate, will be USD 3.15 per million British thermal unit (mmBtu) for the period October 1, 2021 to March 31, 2022, from the current $1.79.
Gas rates from deep water fields like Reliance Industries Ltd’s KG-D6 and BP Plc will increase to $7.4 per mmBtu next month.
Natural gas is the raw material that is converted into compressed natural gas (CNG) for use in automobiles as fuel or piped into home kitchens for cooking.
Prices may increase by 10-11 percent
ICICI Securities has said in a report that city gas distributors (CGDs) will have to hike prices by 10-11 per cent in October. As per the trend in the international markets, the price of APM gas is likely to be US$ 5.93 per mmBtu in April 2022 to September 2022 and US$ 7.65 per mmBtu during October 2022 to March 2023.
CNG and PNG prices will increase in April 2022 as well
This would mean an increase of 22-23 per cent in CNG and piped natural gas (PNG) prices in April 2022 and 11-12 per cent in October 2022.
Prices will increase by 49 to 53 percent
APM gas price hike from $1.79 per mmBtu in the first half of FY22 to $7.65 per mmBtu in the second half of FY23 would mean that MGL and IGL would have to hike prices by 49-53 per cent during October 2021 to October 2022 .
These companies will benefit
The hike in gas price will help boost margins of private companies like ONGC and Oil India Limited (OIL) as well as Reliance Industries Limited.
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