CNG
CNG prices will increase once again. In fact, the government on Monday increased the price of natural gas produced from the old areas under the purview of the Administrative Price System (APM) by 4%. The gas produced from these areas is the major raw materials for the production of CNG, electricity and fertilizer. In such a situation, CNG prices may increase due to increase in APM gas prices. A notification by the Petroleum Scheme and Analysis Cell (PPAC) under the Ministry of Petroleum states that the price of APM gas has been increased from April 1 to $ 6.50 per unit (MMBTU) to $ 6.75 per unit. This decision of the government may see an increase in the price of CNG from April 1.
PNG price will be affected
APM gas is produced from public sector companies Oil and Natural Gas Corporation (ONGC) and Oil India Ltd. (OIL) from areas that were given to them on the basis of enrollment. The gas produced from these areas is used as raw materials as a pipe to drive CNG and fertilizer and power to drive a vehicle through pipes. This is the first increase in the price of APM gas in two years. According to the government’s outline. The Union Cabinet accepted the report of an expert committee to determine the bulk price of natural gas produced at 10 percent of the monthly average import price of domestic levels in April 2023. It fixed the minimum price of four dollars per 10 lakh British thermal units (MMBTU) and a maximum limit of $ 6.5.
Rate will not change up to 2 years
The government with this changed the recommendation of annual growth of $ 0.50 per unit in 2027 until full regulation. The cabinet decided that the rates would not be changed for two years and thereafter an increase of $ 0.25 per annum. The increase on Monday is in line with the same decision. The Petroleum Planning and Analysis Cell (PPAC) said that the price of APM gas from April 1 to April 30, 2025 should have been 10 percent indexation on the price of crude oil, according to the impact of inflation, $ 7.26 per unit. But this price was subject to limit. The price limit has been increased from $ 6.50 per unit to $ 6.75. The limit will be effective from April 2025 to March 2026 and will increase by $ 0.25 per unit in April next year.
Price is now US $ 6.75 per unit
Prior to April 2023, the price of gas produced from areas under the administered price mechanism (APM) system was determined on a half -yearly basis based on a formula. This determination was under formula based on average international prices at four gas trade centers. APM gas holds 70 percent of the total domestic gas production. APM gas is provided to the city’s gas distributors for supply of LPG through pipes in CNG and homes. This is 60 percent of their sales volume. After the decision of April 2023, APM gas prices are revised on a monthly basis, but they are subject to maximum and minimum prices. The maximum price is now US $ 6.75 per unit.
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