Domestic gas producers still unable to recover full cost, but CGD cos can pass on price hike: Expert

Globally, gas prices have been on the rise and the government on Thursday, September 30, announced a 62 percent hike in the price of natural gas, which is used to produce electricity and is turned into compressed natural gas (CNG) to use as fuel in automobiles and cooking gas for household kitchens.

Satpal Garg, a former member of the Petroleum and Natural Gas Regulatory Board (PNGRB), on Friday, said that the city gas companies are in a position to pass on the gas costs to consumers.

“This price will be positive for domestic gas producers, but it will have some negative impact on city gas distribution (CGD) companies. CGDs are in a position to pass on that cost to consumers,” Garg said, in an interview to CNBC-TV18.

“However, my concern is more on domestic gas producers than on CGD companies because even after this price hike, the domestic gas producers are not able to fully recover the cost of production. So, there is a need to relook at the entire pricing formula,” he said.

For the entire interview, watch the video