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GAIL slashes prices of CNG across 20 cities
GAIL India on Saturday announced slashing of compressed natural gas prices by ₹2.50 a kg in 20 cities, including Bengaluru, Patna, Ranchi and the Taj Trapezium Zone, brightening prospects of petrol and diesel rates cut as state-run energy firms are reducing retail prices of fuels ahead of the 2024 general elections.
A “substantial reduction” in the prices of CNG was made across India in areas under its operation, GAIL said on Saturday. The price cut ranged from 2.7% to 3.6% in 20 places including Varanasi, Jamshedpur, Bhubaneshwar, Cuttack, Dewas, Meerut, Sonepat, Dehradun, Puri and Adityapur.
GAIL’s decision coincides with the move of three major state-run oil marketing companies (OMCs) — Indian Oil Corporation, Bharat Petroleum and Hindustan Petroleum – reducing cooking gas rates by ₹100 per cylinder for all 360 million customers, as announced by Prime Minister Narendra Modi on Friday.
“The burden of the price cut will be largely borne by OMCs as government gives cooking gas subsidy to only 103 million Ujjwala beneficiaries,” an executive working for an OMC said, requesting anonymity. Ujjwala beneficiaries — 103 million poor households – get an additional subsidy of ₹300 per 14.2 kg cylinder.
Earlier on Wednesday, Mahanagar Gas Ltd (MGL), and on Thursday, Indraprastha Gas Ltd (IGL), announced CNG rates cut of ₹2.50 per kg. While MGL serve the Mumbai region, IGL serves Delhi and the national capital region. Both firms are promoted by state-run entities. GAIL promotes MGL and IGL is promoted by GAIL and Bharat Petroleum.
“Although announcements happened on different dates, the decisions to cut fuel rates were coordinated. The same could be possible for petrol and diesel in the coming days,” a second person with direct knowledge of fuel pricing by state-run entities said, declining to be named.
The three oil marketers have posted about ₹70,000 net profit in first three quarters of current financial year, as against combined net profit of ₹11.3789 billion in the entirety of 2022-23, and are expected to make significant profits even in the three months to March as average international crude oil rates are more or less stable, he said. State-run OMCs have not changed pump prices of petrol and diesel for 23 months. IOC pumps of Delhi have kept prices of petrol at ₹96.72 per litre and diesel at ₹89.62.
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