Friday, March 24th, 2023

Will CNG and PNG be cheaper? Government can decide the price of gas for the next 5 years

Photo: File CNG price

Lakhs of CNG and PNG consumers of the country can get a big relief soon. The government may soon announce the capping of prices for the next 5 years for the government gas companies (PSU Gas Companies). Under this, these companies will not be able to increase the price of gas for the next five years. With this move of the companies, the customers will not have to face the rising prices of CNG and PNG every month.

PNG and CNG will be cheaper

According to the information received, a price cap can be imposed for five years on natural gas coming out of old fields by public sector companies. The gas price review committee appointed by the government under the leadership of Kirit Parekh has recommended this. It is being told that this will be done to soften the prices of CNG and LPG coming from the pipeline.

how much cost of which company

Public sector companies Oil and Natural Gas Corporation (ONGC) and Oil India Limited (OIL) have now been paid a minimum price of $4 per million British Thermal Unit (per unit) and a maximum of $6.5 as against the current rate of $8.57. Will go Three sources associated with the matter gave this information. However, the pricing formula for gas coming out of difficult fields will not be changed. This pricing arrangement applies to the KG-D6 field of Reliance Industries Ltd and its UK partner BP Plc’s difficult fields.

There is no possibility of major fluctuations in prices

The Parekh committee was tasked with making suggestions to ensure “a market-oriented, transparent and reliable pricing regime to promote a gas-based economy in India”. The committee was also to decide that the end consumer gets the gas at a reasonable price. He said that the minimum and controlled price would be for five years and it would be reviewed every year. This will ensure that prices do not fall below the cost of production, as happened last year. Or even rise to record highs like current rates.

New investment will come in the gas sector

Sources said based on the recommendations of the committee, investment concerns in exploration and production (E&P) could also be addressed. Market-based pricing will encourage new investments and global companies will come here, he said. Sources said city gas would get top priority in the allocation of gas. The sector will be in the ‘zero cut’ category, which means that in case of fall in generation, supply to other consumers will be cut first. The committee, headed by former Planning Commission member Kirit S Parekh, is finalizing its report and will submit it to the government in the next few days. After reviewing these recommendations, the Petroleum Ministry will send it for the approval of the Cabinet.

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