CNG To Get Costlier As Government Hikes Price Of APM Gas After Two Years; Details

CNG Price Hike: The Compressed Natural Gas (CNG) prices might witness a hike in the upcoming days as India has raised prices of natural gas produced from old legacy fields for the first time in two years. A notification from the Oil Ministry said that the APM gas price has been hiked to USD 6.75 per million British thermal units, adding that the new rates will be applicable from April 1.

The government firms Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL) produce APM gas from the fields given to them on a nomination basis. The APM gas is used for several important purposes, including as the input used in the cooking gas for household kitchens and CNG for the automobiles. Apart from this, the gas is also used in making fertilisers and producing electricity.

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However, this is the first time that the government has increased the APM gas price in the last two years based on the roadmap prepared by the authorities. Earlier in April 2023, the Union Cabinet had accepted the proposal from an expert committee, suggesting pricing the domestic gas at 10 per cent of the monthly average import price of crude oil.

While announcing the price hike, the government had announced that the rate will not be changed for the next two years, adding that it will be increased by USD 0.25 annually thereafter. The government had also tinkered with the recommendation of a USD 0.50 per mmBtu annual increase till full deregulation in 2027.

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The Petroleum Planning and Analysis Cell (PPAC) stated that the price is hiked on the basis of the ceiling price, adding that the ceiling price now has been increased from USD 6.50 per MMBtu to USD 6.75. They further stated that the current ceiling will be effective from April 2025 to March 2026, confirming that it will further increase by USD 0.25 per MMBtu in April next year.