Mahanagar Gas (MGL) the natural gas distribution company has announced a reduction in CNG prices of Rs 6 for a kilogram, which now effectively brings the retail CNG price to Rs 80 per kg from Rs 86 per kg.
It is interesting to note that the revision or roll back on CNG comes barely in 10 days, when MGL had hiked the price by the same amount (Rs 6 a kg).
MGL attributes the ability to reduce prices on the back of an increased supply of piped gas to the company.
On the other hand, a recent report by Motilal Oswal stated that the Indraprastha Gas management has admitted that the introduction of electric vehicles can slash the demand for CNG vehicles long-term. And in the mid-term, the increase in prices of CNG could easily dent the sales of green vehicles too.
In FY22, CNG vehicle sales grew 55% year on year to 265,383 units and the growth momentum is continuing so far in FY23. But, with CNG prices inching closer to that of petrol and diesel, and even overtaking petrol in some markets, the growth in vehicle sales could soon hit a brake.
The price of petrol and diesel has been left unchanged for the 84th day by OMCs on August 17. The most recent price reduction had come in Maharashtra when the state government announced a cut in value-added tax (VAT) on petrol by Rs 5 a litre and by Rs 3 a litre for diesel earlier last month.
In Mumbai, one litre of petrol today costs Rs 106.31 while diesel retails at Rs 94.27 per litre.
