Following the steep 62 per cent hike in prices of domestically produced gas announced by the Centre last week, Mahanagar Gas on Monday increased the retail price of compressed natural gas (CNG) and piped natural gas (PNG) by Rs 2 each with immediate effect.

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Given the massive increase in supply-side cost, the company is constrained to increase the base price of CNG by Rs 20/kg and domestic PNG by Rs 2/SCM in and around Mumbai, MGL said in a statement.

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Noting that the re-gasified liquefied natural gas price is also at a historical high now, MGL said these combinations have resulted in a significant increase in the cost of gas being procured by it.

This has forced the firm to pass on the price revision on a progressive manner as the rate hike from the supply side is too large to be passed on at one go, it added.

Accordingly, the revised delivered price inclusive of all taxes of CNG and domestic PNG in and around Mumbai will be Rs 54.57/kg and Rs 32.67/SCM for Slab 1 customers and and Rs 38.27/SCM for Slab 2 customers, respectively.

Even at the new prices, CNG is cheaper by 65 per cent compared to petrol and 44 per cent in the case of diesel. Domestic PNG is cheaper by 34 per cent as against LPG.

On October 1, the Centre increased the price for domestically produced natural gas from fields to USD 2.90 per million British thermal unit and for gas produced from difficult fields such as deepsea to USD 6.13 per mmBtu.