The government is reportedly planning a massive price hike of 15 per cent on natural gas and this move could affect the prices of CNG for households as well as gas prices for vehicles. The price will go up to $3.50 per million metric British Thermal units for the next six months, Financial Express reported.
This price increase could lead to a massive hike in the price of Piped Domestic Cooking Gas (PNG). This would also increase the pressure on retail fuel distributor, fertiliser manufacturers, and power producers. These companies import Liquefied Natural Gas (LNG) and an increase in import could reduce the pressure on them depending on the prices.
This hike could be seen as a means to profit in the oil market in India in companies like ONGC and Oil India.
In early 2018, the government had already raised the domestic natural gas prices by six per cent to $3.06 per million metric British Thermal Units. This was also on a six-month basis and was applicable till August-September. However, the new numbers are according to the government's formula and were calculated on the gross calorific value basis.
