CNG price may go up Rs 4-6 on supply cut, excise duty reduction to ease

The government has slashed by up to 20 per cent the supplies of cheaper domestically produced natural gas to city retailers -- a move that may result in Rs 4-6 per kg hike in the price of CNG sold to automobiles, unless excise duty on the fuel is cut, sources said. Natural gas pumped from below the ground and from under the seabed from sites ranging from the Arabian Sea to Bay of Bengal within India is the raw material that is turned into CNG for sale to automobiles and piped cooking gas to households. Production from legacy fields, whose price is regulated by the government and which are used to feed city gas retailers, has been falling by up to 5 per cent annually due to natural decline that has set in. This has led to supply cuts to city gas retailers, four sources in know of the matter said. While the input gas for piped cooking gas that households get is protected, the government has cut supply of raw material for CNG. Gas from legacy fields used to meet 90 per cent of the dema