CNG prices rise 8 percent, narrowing gap with diesel and petrol may impact demand | The Financial Express

CNG prices rise 8 percent, narrowing gap with diesel and petrol may impact demand

The retail price of CNG in Mumbai at present is Rs 86, compared to Rs 106 of petrol and Rs 94 of diesel respectively. This effectively means the difference between CNG and diesel has been reduced to mere Rs 8.

CNG prices rise 8 percent, narrowing gap with diesel and petrol may impact demand

Fuel prices have been on the rise globally and India is no exception. What’s particularly worrying is that even CNG prices are trending northwards. Unlike the price of petrol and diesel which have stabilised from the peaks of April 2022, the price of CNG has been increasing on an average of 3 percent month-on-month.

Earlier in April this year, the price of CNG per kilogram for automotive was Rs 72, whereas the price of petrol and diesel was Rs 120 per lite and Rs 104 per lite respectively.

In May, wherein there was a reduction of prices for petrol and diesel by 8 percent and 7 percent respectively, the price of CNG increased 6 percent. The trend was similar in June too when the prices of petrol and diesel saw further reduction of 5 percent and 3 percent respectively but CNG remained unchanged.

CNG prices were again increased by 5 percent in July, while petrol and diesel remained stable. The difference between CNG and diesel prices reduced to Rs 14.27 per litre.

The retail price of CNG in Mumbai at present is Rs 86, compared to Rs 106 of petrol and Rs 94 of diesel respectively. This effectively means the difference between CNG and diesel has been reduced to mere Rs 8.

A green fuel option apart from being relatively cheaper, the demand for CNG vehicles has been on the rise. However, with the price difference between CNG, petrol and diesel narrowing down significantly, it will be interesting to see how demand dynamics pan out going forward.

What may further impact the CNG prices is the fact that the government has hiked prices of domestically-produced natural gas from normal and difficult fields by 40% and 26%, respectively, for the October 2022-March 2023 period. This will likely make gas-based electricity, CNG and pipe-based natural gas costlier.

CNG
(Price in Rs)
Change (MoM)Petrol
(Price in Rs)
Change (MoM)Diesel
(Price in Rs)
Change (MoM)
April72120.51104.77
May766%111.35-8%97.28-7%
June760%106.31-5%94.27-3%
July805%106.310%94.270%
August868%106.310%94.270%
September80-7%106.310%94.270%
October868%106.310%94.270%
(all retail price – Mumbai)

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First published on: 27-10-2022 at 18:16 IST