Since prices have come down, the raw material cost for compressed natural gas and natural gas piped to households would become cheap and this would automatically translate into lower retail prices. Fertiliser and power companies will also benefit from lower gas price, according to a release by the Union ministry or Petroleum and Natural Gas.
The price of natural gas based on gross calorific value has been revised lower to $2.5 per million British thermal unit (mmBtu), with effect from October 1, from the current level of $3.06.
The price cut could result in a reduction of Rs. 0.5 to Rs. 1.5 per standard cubic meter in the price of cooking gas or piped natural gas (PNG) for domestic customers and a Rs. 0.8-1.5 per kg cut in case of CNG, according to Industry reports.
Although this is a good news for the consumers, the rate cut will hit hard for the ONGC, the largest producer or natural gas. It may lose up to Rs 800 crores, according to reports.