The prices of CNG and cooking gas piped to household kitchens in the national capital on Saturday were cut by up to Rs 6 - the first reduction in two years - after the government changed the pricing formula of natural gas.

CNG in the national capital territory of Delhi will now cost Rs 73.59 per kg, down from Rs 79.56, Indraprastha Gas Ltd (IGL) - the firm which retails CNG and piped cooking gas in the city, said in a Twitter post.

Simultaneously, the rates of gas piped to household kitchens, called piped natural gas (PNG), has been cut to Rs 48.59 per standard cubic metre in Delhi from Rs 53.59 per scm, according to IGL.

The reduction follows an over 80 per cent increase in prices in two years. CNG prices were hiked on 15 occasions between April 2021 and December 2022. Since April 2021, CNG prices have increased by Rs 36.16 per kg, or 83 per cent, according to data compiled by PTI.

CNG prices were last hiked on December 17, 2022.

Similarly, PNG rates have increased by 10 times between August 7, 2021, and October 8, 2022. In all prices have gone up by Rs 24.09 per scm, or 81 per cent.

Rates went up as energy prices internationally climbed due to geopolitical conflicts. Prices would have risen further but for the change in the way the price of natural gas - the input raw material which is converted into CNG and PNG - was changed by the government on Thursday evening.

So instead of using rates in four international gas hubs, the locally produced fuel is now benchmarked to the cost of imported crude oil subject to a cap of USD 6.5 per million British thermal unit.

The pricing formula kicked in from Saturday with the oil ministry announcing a gas price of USD 7.92 per mmBtu for the remainder of the month. But due to the cap, the gas will cost only USD 6.5 to city gas retailers like IGL.

This USD 6.5 per mmBtu cap price compared with USD 8.57 rates prevalent previously.

In the Twitter post, IGL said the retail prices charged by it for CNG and PNG in the national capital "are one of the lowest in the country." "The revised retail price of PNG in Delhi would be Rs 48.59 per scm wef 9th April 2023," it said. "The revised retail price of PNG in Noida, Greater Noida & Ghaziabad would be Rs 48.46 per scm wef 9th April 2023." The revised retail price of PNG in Gurugram, Rewari, Karnal & Kaithal would be Rs.47.40 per scm.

Similarly, the revised retail price of CNG in Delhi would be Rs 73.59 per kg, Rs 77.20 in Noida, Greater Noida and Ghaziabad and Rs 82.62 per kg in Gurugram.

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