Under the new formula, the price of CNG and PNG has now been linked with imported crude.
This formula to reduce the prices of CNG and pipeline-supplied domestic gas i.e. PNG has been approved in the meeting of the Union Cabinet which was presided over by Prime Minister Narendra Modi himself. After the implementation of this new formula, the prices of CNG and PNG will come down by up to ten percent in one stroke. Apart from this, now the prices of CNG and PNG will be done every month instead of every six months. The new formula for fixing domestic gas prices will come into force from Saturday.
CNG and PNG will soon reduce the prices of CNG and PNG by ten percent in one go. Under the new formula, the price of CNG and PNG has now been linked with imported crude. Imported crude means that crude oil which India buys from other countries. The government has decided that now the price of domestic gas will be 10% of the price of the Indian crude basket. This means the price at which India will buy crude oil, the price of domestic gas will be equal to ten percent of that.
To put it simply, if the price of the Indian crude basket is $85, then the price of domestic gas in India will be 10 percent of that, ie $8.50. Similarly, the unit of gas is MMBTU, whose full form is Metric Million British thermal units. And one MMBTU contains about 23 kg of natural gas. So according to this, under the new formula... if the crude oil rate is $85 per barrel, then the price of natural gas in India will be - eight and a half dollars per MMBTU.
At present, the price of CNG in Delhi is Rs 79.59 per kg, which can be reduced to Rs 73.59. The price of PNG is Rs 53.59 per thousand cubic meter which can come down to Rs 47.59. Similarly, CNG is currently being sold at Rs 87 per kg and PNG at Rs 54 per thousand cubic meters in Mumbai. After this decision, CNG can be up to Rs 79 and PNG up to Rs 49 in Mumbai. CNG is currently being sold at Rs 89.5 per kg and PNG at Rs 58.5 per thousand cubic meters in Bengaluru. Now CNG can be up to Rs 83.5 and PNG up to Rs 52 in Bengaluru.
Rating Agency CRISIL has said in its report that the old process of setting gas prices had to be increased now. But it will decrease under the new formula. And the general public will get its direct benefit.
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 "DNA Special: How the new CNG-PNG price formula will benefit consumers")
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