CNG, PNG worth reduce:  Mahanagar Fuel (MGL) on April 8 (Friday) introduced a discount in fuel costs in Mumbai. As per stories, CNG can be cheaper by Rs 8/kg whereas the PNG worth has been lowered by Rs 5/commonplace cubic metre or scm within the monetary capital of the nation. 

The event got here after the Union Authorities introduced earlier on Friday that for the remainder of April, the pure fuel costs could be capped at USD 7.92 per unit, as per the newly-approved pricing components. Nevertheless, the charges for customers have been capped at USD 6.5 per unit. 

CNG stands for compressed pure fuel whereas PNG is an acronym for piped pure fuel.

As per the components accredited by the Union Cupboard on Thursday, the costs of piped cooking fuel and compressed pure fuel utilized by automobiles have been reduce by as much as 10 per cent. The Cupboard in its order accredited a change within the components that’s used to calculate the value of pure fuel and glued ceiling worth (or higher cap) to assist reduce the costs of those important commodities. The modifications accredited by the Cupboard within the fuel pricing components are per the suggestions of a committee headed by Kirit Parikh.

CNG, Piped Cooking Fuel to price 10% much less: What’s the revision in Fuel Pricing Method?

Union I&B Minister Anurag Thakur knowledgeable that the Union Cupboard has determined to index the value of APM fuel, or the pure fuel derived from outdated oil fields, to the value of imported crude oil. Earlier, it was benchmarked to fuel costs in surplus nations like america of America, Russia and Canada.

After this determination, APM fuel will now be priced at 10 per cent of the value of the Indian basket of crude oil — which is the price of the basket of crude oil that India imports.

Moreover, the speed from this calculation could have an higher ceiling of USD 6.5 per million British thermal models (Btu). The Minister additional knowledgeable {that a} base worth, or flooring charge, of USD 4 per mmBtu, will even come into impact.

This new ceiling worth introduced by the Cupboard is far decrease than the prevalent charge of USD 8.57 per mmBtu. Therefore, this may result in a reduce in costs of CNG and piped cooking fuel, he added.

How a lot will CNG, and PNG costs be reduce in Delhi, and Mumbai?

Successfully, the price of piped cooking fuel costs will cut back by as much as 10 per cent throughout cities, and there can be a barely lower than 10 per cent reduce in CNG costs. 

CNG worth in Delhi will cut back by as much as Rs 6 (down from Rs 79.56 per kg to Rs 73.59) and the price of piped pure fuel will cut back from Rs 53.59 per thousand cubic meters to Rs 47.59 — a discount of Rs 6 per thousand cubic meters. 

Mumbai will see a worth reduce of Rs 8 per kg of CNG. The CNG costs within the metropolis will go down from Rs 87 to Rs 79 per kg, whereas PNG costs will cut back from Rs 54 to Rs 49 per scm.

*Topic to ultimate calculation of impression of unified tariff, RLNG element, earlier price switch to customers, and so on.

CNG, Piped Cooking Fuel to price 10% much less: Why was this wanted?

As per a PTI report, charges of PNG, and CNG have jumped 80 per cent in a single yr to August 2022, following a spurt in worldwide vitality costs.

The present worth of the Indian basket of crude oil is USD 85 per barrel and 10 per cent of this determine interprets to USD 8.5. Nevertheless, the ceiling signifies that the APM fuel producers – ONGC and Oil India Ltd – will solely obtain USD 6.5 per mmBtu.

The minister additional knowledgeable that the ground costs and ceiling cap could be in place for 2 years, following which the charges will rise by USD 0.25 per mmBtu per yr.