New pricing norms may make CNG, PNG cheaper by 11%
The new pricing norms, which was approved by the union cabinet on Thursday, are likely to make piped natural gas (PNG) and compressed natural gas (CNG) cheaper by 9 to 11 per cent, CRISIL Ratings said on Friday.
The administered price mechanism (APM) formula is now revised and determined as a 10 per cent slope to crude oil prices, but with a floor and ceiling price of $4 per million British thermal unit (mmBtu) and $6.5/mmBtu, respectively. During the month of March 2023, the average crude price stood at $78 per barrel. On the basis of this, the ceiling price of gas will be $6.5/mmBtu.
