CNG To Get Costlier By Rs 3.89, Says IGL. Price In Delhi Nears Rs 87/kg

Compressed natural gas (CNG), mostly used in autos, cabs, buses, and economy-focused personal cars, has increased by Rs 3.89 from today, the Indraprastha Gas Limited (IGL) said on Friday night. The price in Delhi-NCR, where IGL operates, will now stand at Rs 86.98 a kg.

IGL, a public sector unit, noted that international liquefied natural gas (LNG) prices are "elevated". With the "cost impact becoming increasingly significant", the company said, "a calibrated revision of ₹3.89 per kg has now become necessary to partially offset the increase in input gas cost while ensuring continuity and reliability of CNG supplies".

"Even after this revision... CNG retail price in Delhi continues to be amongst the most economical options for consumers," it noted in the announcement. "CNG consumers (private cars, auto and taxi, public transport users and other price-sensitive sections of society) are largely being insulated from the impact of volatile increases in imported spot LNG prices," it added.

It pointedly cited the "re-escalation of West Asia crisis" - meaning the US war on Iran - and the impact on cargo movements through the Strait of Hormuz. Global LNG prices have nearly doubled as compared to the pre-crisis period, it added. "Additionally, there is an urgency in Europe to increase their natural gas storage on account of the approaching winter season."

The IGL release added, "In these challenging times, CNG consumption is also witnessing significant jump in line with fast growing Indian economy and surging consumer demand. In order to meet this rising demand for CNG, a significant portion of input gas for the CNG segment is being met through imported Spot LNG. [These] factors have resulted in a considerable increase in input gas cost for CNG segment."

It said Delhi's CNG retail price remained "more or less stable during the Hormuz crisis" while international gas price benchmarks rose sharply during the same period.