CNG prices to go down from tomorrow: How much can you expect to save?


The Union Cabinet has tweaked the pricing guidelines for natural gas which is expected to bring down the rising prices of CNG and piped natural/cooking gas (PNG) in the country. The new mechanism is expected to reduce the price for CNG and PNG by approximately 10 percent. After a sudden spike in international prices, rates for both CNG and PNG have jumped by 80 percent in the past few months. So what kind of savings will the new pricing structure translate into for your pocket? Let’s find out.

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The new pricing method will be imposed from April 8, 2023. It is expected to reduce the current price of CNG in Delhi from Rs 79.56 per kg to approximately Rs 73.59 per kg. In Mumbai, CNG costs Rs 87 per kg and this is expected to get revised to 79 per kg.
For perspective:
Let’s assume, a Maruti Suzuki Alto 800 CNG returns 30 km per kg of CNG on average. At this rate, it will run 1,000 km in approximately Rs 2,652 at Rs 79.56 per kg. From April 8, assuming an average price reduction of 8 percent under the new structure, the same car will now run 1,000 km in approximately Rs 2,453 worth of CNG (33.33 kg CNG on average). At a per km basis, the Alto 800 CNG costs Rs 2.52 per km to run at current rates and this will come down to approximately Rs 2.3 per km average running cost.


How has the pricing structure changed?
Up till now, prices for natural gas was based on benchmark rates of gas in surplus nations such as the US, Canada and Russia. The Union Cabinet has now taken the decision to index the gas prices at 10 percent of the price of a basket of imported crude oil. Currently a basket of crude oil costs USD 85 per barrel, the new price ceiling will help to cut down gas prices from USD 8.5 (10 percent), to USD 6.5, which will further lead to an overall price reduction of CNG and PNG domestically.
Will the indicated reduction in CNG prices make your daily commutes more affordable? Tell us in the comments.

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