The general public facing the brunt of inflation can get a big relief in the matter of gas. Soon the prices of CNG and PNG are going to be reduced in the country. In the cabinet meeting chaired by PM Narendra Modi on Thursday, important decisions were taken on many issues including the price of CNG-PNG. The government has approved a new methodology for fixing the price of natural gas to control prices. Natural gas produced from conventional fields recognized as APM gas will now be linked to crude oil prices instead of gas prices in countries like the US, Canada and Russia, Union Minister Anurag Thakur told after a cabinet meeting on Thursday.
Union Minister Anurag Thakur gave information
Union Minister Anurag Thakur said that now it has been decided to fix a maximum limit on the prices of CNG and PNG gas supplied through pipes (CNG-PNG Price). For this, a base price of $4 per mmBtu has been approved on APM gas. Along with this, it has also been decided to keep a maximum price of $ 6.5 per MMBTU.
This formula made to fix the price
Minister Anurag Thakur said that under the new formula approved in the cabinet, the prices of CNG-PNG gas (CNG PNG Price) will now be linked to crude oil. The domestic gas price will now be 10% of the monthly average of the global price of the Indian crude basket. This price will be notified every month. This formula will reduce the prices of PNG by up to 10%. At the same time, the prices of CNG will come down by 7-9%. From this, from common domestic consumers to farmers and people driving vehicles, it will be of great benefit.
Earlier prices were fixed like this
Till now the government used to fix the price of CNG-PNG twice a year. These prices were announced on April 1 and October 1. To determine these prices, the prevailing rates in countries like Canada, America and Russia were made base with an interval of one quarter in a year. Now in the new policy, this method of pricing has been changed to link it with the prices of imported crude oil and now these prices will be declared monthly.
The decision will be implemented from Saturday
The government will issue a notification on Friday to announce this change and the decision will come into effect from Saturday. The price of such natural gas would be 10 per cent of the monthly average of the Indian crude basket, the government said in a statement.
Let us tell you that India is targeting to increase the share of natural gas in the primary energy mix from the current 6.5 percent to 15 percent by 2030. The reforms will help in expanding the consumption of natural gas and help in achieving emission reduction and carbon emission targets.
How much benefit to the consumers?
Oil Minister Hardeep Puri welcomed the decision in a tweet. He said that this step will protect the interests of the consumers. At present, domestic gas prices are fixed every six months based on prices at four gas trading hubs – Henry Hub, Albena, National Balancing Point (UK) and Russia.
The government has said that the pricing methodology based on four gas hubs had high time lag and high volatility, hence the need for this reform was felt. ( PLC/GT )
