New Delhi: CNG and piped cooking gas costs in cities resembling Delhi and Mumbai could also be hiked by 10-11 per cent subsequent month because the government-dictated gas price is set to rise by about 76 per cent, ICICI Securities mentioned in a report.
The authorities, utilizing charges prevalent in gas-surplus nations, fixes the price of pure gas produced by corporations resembling state-owned Oil and Natural Gas Corp (ONGC) from fields given to them on nomination foundation, each six months. The subsequent evaluation is due on October 1.
The price, referred to as APM or administered fee, will rise to USD 3.15 per million British thermal unit (mmBtu) for the interval from October 1, 2021 to March 31, 2022 from the present USD 1.79, the brokerage mentioned.
The fee for gas from deepwater fields resembling KG-D6 of Reliance Industries Ltd and BP Plc would rise to USD 7.4 per mmBtu subsequent month.
Natural gas is the uncooked materials that’s transformed into compressed pure gas (CNG) to be used in cars as gasoline or piped to family kitchens for cooking functions.
“The expected surge in APM gas prices would present a challenge to city gas distribution (CGD) players as it would mean a rise in their gas cost for CNG and residential piped natural gas,” it mentioned. “APM gas price rise would mean hefty price hikes would have to be made by IGL (that retails CNG in national capital and adjoining cities) and MGL (which retail CNG in Mumbai) in the next one year.”
The metropolis gas distributors (CGD) “would have to make price hikes of 10-11 per cent in October,” ICICI Securities mentioned in a report.
Going by the development in worldwide markets, the APM gas price is probably going to rise to USD 5.93 per mmBtu in April 2022 to September 2022 and to USD 7.65 throughout October 2022 to March 2023.
This would imply one other 22-23 per cent hike in CNG and piped pure gas costs in April 2022 and 11-12 per cent in October 2022, it mentioned.
“Rise in APM gas price from USD 1.79 per mmBtu in H1FY22 to USD 7.65 per mmBtu in H2FY23E would mean MGL and IGL would have to make price hikes of 49-53 per cent during October 2021 to October 2022,” it mentioned. “CGD players may be able to make the required hefty price hikes given sharply higher prices of competing fuels, petrol and diesel. However, some hit to prevailing lofty margins of MGL and IGL cannot be ruled out.” Also Read: Big PPF replace! Senior residents can now withdraw funds with out Post Office go to, test course of
The rise in gas price would assist increase margins of ONGC and Oil India Ltd in addition to personal corporations resembling Reliance Industries Ltd (RIL). Also Read:Â seventh Pay Commission: Pensioners physique seeks PM intervention in DA, DR arrears matter
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