Fri Oct 18 05:00:42 UTC 2024: ## CNG Prices May Spike Before Diwali: Consumers Face Another Blow
**New Delhi:** CNG prices in India are poised to rise by ₹5 per kg just before Diwali, dealing another blow to consumers already grappling with inflation. This surge is being attributed to a 20% reduction in the supply of domestically produced, cheaper natural gas to urban gas companies.
Companies like Indraprasth Gas Limited (IGL) and Mahanagar Gas Limited (MGL), who distribute CNG, have reported the supply cut to the stock market. This cheaper gas is critical in maintaining their profit margins. With reduced supply, companies are forced to consider increasing CNG prices to maintain their profitability.
The supply cut, which comes into effect on October 16, has impacted IGL’s CNG sales volume, potentially affecting its profit. MGL, too, has faced a 20% reduction in their CNG allocation compared to the previous quarter and is actively seeking alternative solutions.
While experts believe that this price hike could be delayed until after the Maharashtra and Jharkhand Assembly elections, the impact on CNG vehicle sales remains a concern.
This news comes on the heels of a recent VAT reduction on CNG in Bihar, making the fuel more attractive. However, the looming price hike across India could dampen the growing popularity of CNG vehicles.
The government’s decision to cut domestic gas supply raises concerns about the long-term impact on CNG affordability and its role in promoting cleaner fuel options.
First Piper 