CNG and PNG bills to come down after the revision in the price of domestic gas become cheaper. The fuel price is expected to dip by 18%, or $2.5 per unit from $3.06.
The revision, which happens every six months, is bad for producers such as state-run ONGC and Oil India Ltd as well as private sector Reliance Industries.
The new price in tune with global benchmarks shrunk and could render many gas fields. ONGC’s annual revenue which is Rs4,000 cr would reduce by Rs1,000 crore in the remaining period of the fiscal.
The reduction will also hit the exchequer as royalty and income-tax will also go down by an estimated Rs800 crore during the remaining period of the fiscal.
Lower gas price would reduce input costs of CNG and PNG service providers who use supplies from domestic fields to feed common consumers.
Reduction in CNG price could range between 80 paise and Rs 1.50 per kg. PNG prices are expected to come down between 50 paise and Rs1.5 per unit, in accordance with the respective price slabs.
Gas price was last cut by 20% to $3.06 from 1 April. The price of gas between 1 October 2015 and 31 March 2016 was $3.81 per unit and $4.66 in the preceding six months.