The government raised the prices of the cooking gas and turned into CNG to use as fuel in automobiles and cooking gas for household kitchens.
This hike is the first, since April 2019 and the new prices will be in effect for six months, starting from October 1. Natural Gas Prices have an impact on state owned companies like Oil & Natural Gas Corp Ltd. & Oil India Ltd.
Lower Production combined with rising demand increased North American & European gas prices, prompting the union Government to hike the price of locally produced gas by 62% to $2.90 per million British thermal units (mmBtu).
Consequences of Increase in Gas Prices:
The increase in Gas prices is likely to result in a 10-11 percent rise in CNG and piped cooking gas rates in cities as Delhi & Mumbai. It will also lead to a rise in cost of power generation, but consumers may not feel any major pinch as the share of power produced from gas is very low.
Impact on Farmers:
The decision might have negative impacts on businesses such as power & fertilizers, as well as raise inflation and put a burden on the country’s current account. Farmers may be impacted if the government does not increase fertilizer subsidies to counteract the surge in imported urea and DAP prices. The prices increase may be passed on to customers by city gas stations.
Commercial LPG Cylinder to Get Costlier from today:
The price of 19Kg Commercial Cylinder will now costs Rs 1736.5 in Delhi, from October 1. Petroleum Companies increase price of commercial LPG Cylinders by Rs 43.
In September also, the prices of LPG Cylinders were increased significantly.
In Kolkata, the cylinder will be sold at Rs 1805.50. The price of Domestic cooking gas has almost doubled in the last seven years. The retail selling price of domestic gas was Rs 41.5 per 14 kg cylinder on March1, 2014.
