Mumbai CNG price hits Rs 86, after Rs 2 per kg hike by MGL, second in two weeks

Compressed natural gas (CNG) prices in the Mumbai Metropolitan Region have increased by Rs 2 per kilogram, taking the retail rate to Rs 86 per kg, as Mahanagar Gas Limited (MGL) grapples with rising procurement costs amid disruptions in global energy markets and reduced domestic gas allocations. The development comes at a time when the global energy supply chain has been upended by the ongoing West Asia conflict, particularly due to the tension over the Strait of Hormuz.

Second hike in two weeks

The hike, effective Saturday (May 30), is the second increase in just over two weeks and has pushed up CNG prices in Mumbai by a cumulative Rs 4 per kg since May 14. Alongside the CNG revision, MGL has also raised domestic piped natural gas (PNG) prices by 50 paise per standard cubic metre, with the new rate set at Rs 52 per unit. The revised prices apply across Mumbai, Thane, Navi Mumbai, Kalyan and nearby areas served by the state-run gas distributor.

Rising input costs cited

As for the reason behind the move, MGL attributed the increase to a sharp rise in input costs. "Due to a significant increase in gas procurement costs caused by reduced allocation of domestic gas, increased dependence on higher-cost gas sources and depreciation of the Indian Rupee, the overall cost has risen considerably," MGL said in a statement following the hike, reported NDTV.

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Elaborating further, the company stated that it continues to look for ways to reduce the burden on consumers despite the challenging market conditions. "The company continues to explore avenues to optimise costs and pass on benefits to consumers, ensuring the widespread adoption of natural gas as a cleaner fuel alternative," it added.

MGL had earlier informed commercial customers that support schemes and subsidies would be discontinued from May 25 because of the financial pressure arising from the West Asia crisis.

West Asia tensions impact energy markets

Broader fuel markets have also been affected by the geopolitical tensions. Petrol and diesel prices have witnessed multiple increases in recent weeks as global crude oil prices surged following the US-Iran conflict.

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Additional uncertainty has emerged from disruptions to shipping through the Strait of Hormuz, a strategic route that handles nearly 20 per cent of global oil and liquefied natural gas supplies.

Impact beyond Mumbai

Although the higher CNG rates will raise operating expenses for private vehicle owners, taxi operators and public transport fleets, the fuel remains cheaper than petrol and diesel on a per-kilometre basis.

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Similar price increases have been implemented by city gas distributors in other parts of the country, including Indraprastha Gas Limited in North India, highlighting the wider impact of escalating energy procurement costs.