In a decision that will affect all electricity and CNG consumers, the government on Wednesday raised the price of natural gas sold under the administered price mechanism by more than double, to $4.20 per mmBtu.
This is likely to lead to a 2.75 per cent increase in power tariffs and a 20 per cent increase in the price of CNG sold to motorists in New Delhi (where it costs Rs 21.90/kg) and elsewhere.
This was decided at a meeting of the Union Cabinet chaired by Prime Minister Manmohan Singh. Speaking to reporters, information and broadcasting minister Ambika Soni said: “The Cabinet hiked price of gas sold to power, fertiliser and city gas projects from Rs 3,200 per thousand cubic metres ($1.79 per million British thermal unit) to Rs 6,818 per thousand cubic metres ($3.818 per mmBtu).” After adding royalty, the price for user industries would be Rs 7,500 ($4.20 per mmBtu), at par with the rate at which private gas explorers, including Reliance, sell their gas. Fertiliser prices, however, may not go up.