Summary:
Natural gas prices are set every six months based on average rates in gas-surplus markets such as the US, Canada, UK and Russia.A weak rupee will amplify the impact on CNG and PNG prices in all cities with such services. The rupee’s slide has been making natural gas costlier for CNG and PNG service providers, forcing them to raise prices.In Delhi and its suburbs, Indraprastha Gas Ltd (IGL), the sole supplier of such services in the reigon, has raised CNG prices thrice since April, totalling Rs 2.89 per kg. Indian gas prices are calculated by taking weighted average price at Henry Hub of the US, National Balancing Point of the UK, rates in Alberta (Canada) and Russia with a lag of one quarter. After pushing petrol and diesel prices to historic highs across the country, a substantially weakened rupee is expected to jack up CNG (compressed natural gas) and PNG (piped natural gas) prices from October 1 when the routine six-monthly revision in domestic natural gas prices happens.Indications are that the base price of gas produced from domestic fields is expected to rise 14% to $3.5 per unit, the highest since $3.82 per unit for the six months ended March 2016. So, the rate for October 2018 to March 2019 is based on average price at the international hubs during April 2017 to March 2018..