New Delhi: After the Central government reduced the price of domestically produced natural gas, the Mahanagar Gas Limited (MGL) has decided to reduce the price of Compressed Natural Gas (CNG) by Rs 2.04 per kg and domestic Piped Natural Gas (PNG) by Rs 1.19 per SCM in and around Mumbai from October 3 midnight.
“MGL has reduced its CNG price by Rs 2.04 per kg and PNG by Rs 1.19 per SCM in and around Mumbai effective from tonight,” the company said in a statement.
As per the new price, the CNG will be available at Rs 49.95 per kg and domestic PNG will be available at Rs 30.60 per SCM.
“After the revision, MGL’s CNG offers attractive savings of about 55 per cent and 29 per cent as compared to petrol and diesel respectively at current price levels in Mumbai,” MGL further stated.
The decision from the MGL comes days ahead of the Maharashtra Assembly poll which is scheduled to be held on October 21. The results of the same will be announced on October 24.
The Central government had on September 30 announced a 12.5 per cent reduction in domestic natural gas price to $3.23 per million British thermal units (mmBtu) from $3.69 per mmBtu (on a gross calorific value basis). The price reduction, the first since April 2017, is effective from October 1, 2019, to March 31, 2020.
In another development, Moody’s Investors Service said on Thursday said that the price cut in domestic natural gas is credit negative for India’s biggest producer ONGC as its earnings will fall by over Rs 1,400 crore.
“The price decrease is credit negative for Oil and Natural Gas Corporation Ltd (ONGC) because its revenue and earnings from the gas business will fall by around Rs 1,460 crore. The decline is equal to 0.3 per cent of the company’s expected consolidated revenue and around 2 per cent of consolidated EBITDA for fiscal 2020, which ends on March 31, 2020,” Moody’s said in a note.
The Moody’s Investors Service further stated that the decline in natural gas revenue and earnings will have a limited effect on ONGC’s metrics for fiscal 2020 because its gas business is small compared with its total upstream business.
(With inputs from PTI)