CNG and PNG Prices Stay Steady, but International Pressures Persist
IGL has confirmed no immediate plans for price hikes on CNG or PNG due to ongoing market watches and optimistic prospects of stabilizing gas prices. However, international variations may still impact domestic supply costs.
Highlights
- •Indraprastha Gas Limited (IGL) assures minimal changes in PNG prices despite delays in the arrival of LPG cylinders.
- •CNG faces more pressure due to half its supplies coming from imported RLNG, influenced by global market dynamics.
- •Government is considering tax adjustments but aims for any changes to provide relief without disrupting stability.
- •Efforts are being made to increase daily new PNG connections to promote wider adoption of natural gas.
Due to delays in the arrival of LPG cylinders, many consumers are wondering about potential price hikes for domestic cooking gases. However, Indraprastha Gas Limited (IGL), the regulator of piped natural gas (PNG) supplies in India, has assured that there are no significant plans to raise PNG prices at this time.
According to IGL's Managing Director K.K. Chatiwal, an average household using PNG consumes approximately 12 standard cubic meters (SCM) every month. Even if the price increases by just 1 to 1.5 rupees per SCM, the cost for the average family would only increase by around 20 rupees each month, indicating manageable expense fluctuations.
The situation with Compressed Natural Gas (CNG), on the other hand, is more complex. Approximately half of CNG supplies are sourced from imported liquefied natural gas (RLNG) whose global market prices are subject to volatile changes. Local sources such as APM and new gas fields also face price hikes, adding additional pressures. Despite these factors, IGL currently has a wait-and-see approach due to hopes that decreasing crude oil prices may stabilize the situation.
Government Surveillance and Tariff Adjustments
The government is closely monitoring the market and considering tax adjustments including changes in excise duties, customs, and value-added taxes (VAT). At present, the excise duty stands at about 14%, the customs duty on imported LNG remains at 2.75%, while VAT rates vary significantly across different states ranging from 0% to 16%. Any modifications in taxation might provide relief to consumers but remain contingent upon market stability.
Efforts are also underway to expand PNG connections, with the Government setting a target for companies to increase daily new connections to up to 30,000 from current levels of roughly 10,000. Additionally, many households still maintain LPG as an alternative, making an all-encompassing shift to PNG unlikely in any short-term forecasts.
