PNG-CNG rate cut: In a move to reduce the burden on common public, the government on Thursday has brought new pricing formula for the domestic-produced natural gas by state-rum explorers: 10 per cent of monthly average import price of crude oil with a floor of $4 per unit and a cap of $6.5.
This step will cut the costs of piped natural gas ( PNG)that is supplied to kitchens and compressed natural gas (CNG) by 11 percent from April 8 (Saturday).
The minister Anurag Thakur said, “If CNG is priced at ₹92 per kg in Pune, it will be reduced to ₹87 a kg, he said. Similarly, PNG will cost ₹52 instead of ₹57. In Mumbai, if it is ₹54, it will become ₹52. In Delhi, it will be reduced from ₹53.49 to ₹47.49. In Bengaluru, it will drop from 58.5 to ₹52, he added. APM or the administered price mechanism is applicable to those blocks that have been given to state-run explorers — Oil and Natural Gas Corporation (ONGC) and Oil India Ltd (OIL) – on nomination basis, without competitive bidding.
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The new guidelines are intended to ensure stable pricing regime for domestic gas consumers while at the same time providing adequate protection to producers from adverse market fluctuation with incentives for enhancing production.
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Government has targeted to increase the share of natural gas in primary energy mix in India from current 6.5% to 15% by 2030. The reforms shall help expand the consumption of natural gas and will contribute to achievement of target of emission reduction and net zero.
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