CNG price hike: Amid an unprecedented flurry of retail modifications, city gas distribution firms imposed yet another Rs 2 per kg increase in the rate of Compressed Natural Gas (CNG) on Tuesday, 26th May, in the early hours of the morning. The recent hike constitutes the third price increase in less than two weeks, reflecting the dire consequences of fluctuating international energy markets on domestic retail utilities.
Rapid hike in 11 days
The modification has come into effect nationwide from 6:00 AM, Tuesday morning. As a consequence, commuting expenses have instantly undergone a drastic change across major commuting routes.
Price in Delhi: In view of the Rs 2 hike per kg, CNG will be priced at Rs 83.09 per kg in the national capital.
Timeline of recent hikes: This constitutes the second price rise in the last nine days. In the recent past, the Oil Marketing Companies had increased prices by Rs 1 per kg on Saturday, following the earlier price rise by Rs 2 per kg witnessed on May 15.
Hike over last 11 days: Over the last 11 days, CNG prices have risen to a total of Rs 5 per kg.
Similar surcharge for surrounding hubs of NCR & Mumbai
The knock-on effect of the energy price hike is having far-reaching effects, fast transforming the economics of fuels in nearby industrial hubs as well as the country’s financial capital.
In nearby corridors like Noida, Greater Noida, and Ghaziabad in Uttar Pradesh, the rate of fuel prices for both domestic and commercial transport vehicles is now pegged at an extremely high ₹88.70 per kg. The same trend has been witnessed in Mumbai, where the new price of CNG for distributors is fixed at ₹84.00 per kg.
Domestic PNG and LPG cylinder prices rarely affected
Whereas the transportation sector is struggling to cope with an immediate rise in costs, the domestic sector has been granted a form of immunity for now. According to statements from public utility companies and the country’s gas distribution network, there have been no immediate changes to the prices of Piped Natural Gas (PNG) delivered to household kitchens. Likewise, there have been no changes to the rates of domestic Liquefied Petroleum Gas (LPG) cylinders at this point.
Geopolitical tension in Strait of Hormuz pushes brent crude up to $86
According to energy analysts and industry professionals, the reason for the fast-paced price corrections lies in geopolitical risks in the region. The continued tension between the U.S. and Iran has triggered a series of alarming reports regarding possible traffic disruptions in the Strait of Hormuz—the only crucial oil passage in the world.
As a result, benchmark prices have surged. Brent Crude oil has been trading in excess of USD $86 per barrel after reaching USD $72 per barrel in the days leading up to the eruption of hostilities in the Middle East on February 28. Caught in the slipstream of global supply-chain shocks and mounting import premiums, domestic distributors have been forced to continuously tweak consumer prices to mitigate mounting structural deficits.
Bureau Report
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