MGL Raises CNG and PNG Prices Again Amid Rising Gas Procurement Costs
Price increase reflects rising LNG procurement costs, shrinking domestic gas allocations, and MGL's efforts to protect margins amid market volatility
Mahanagar Gas Limited (MGL) has once again increased retail gas prices across the Mumbai Metropolitan Region (MMR), raising the price of Compressed Natural Gas (CNG) by Rs 2 per kg to Rs 86 per kg, while Piped Natural Gas (PNG) prices have been increased by 50 paise per unit to Rs 52 per unit. This is the second upward revision in May, signaling a significant shift in the company’s pricing strategy.
Traditionally, MGL reviewed gas prices on a monthly or quarterly basis. However, the recent back-to-back revisions indicate a move towards a more frequent, responsive pricing mechanism aimed at managing volatility in gas procurement costs.
Industry observers attribute the latest hike to the declining allocation of low-cost domestic natural gas under the government’s Administered Pricing Mechanism (APM). As domestic gas supplies become constrained, city gas distribution companies such as MGL are increasingly dependent on imported liquefied natural gas (LNG), which remains vulnerable to global supply disruptions, geopolitical tensions, and currency fluctuations.
Higher CNG prices may narrow the cost advantage over conventional fuels, potentially affecting consumption patterns. In the longer term, the accelerating adoption of electric vehicles (EVs) poses an additional challenge to growth prospects for city gas distributors.
Despite these concerns, CNG continues to remain a comparatively economical and environmentally cleaner fuel option for commercial transport operators and private vehicle owners in the Mumbai region.
