CNG, piped gas prices to be cut but no clarity on deregulation: Analysts

CNG and piped cooking gas prices will be cut by 9-11 per cent after the government revised the formula for pricing of natural gas, but there is no clarity on deregulation of the fuel, analysts said.

While the Union Cabinet accepted an expert committee report to price bulk of domestically produced natural gas at 10 per cent of month average import price of crude oil with a floor of USD 4 per million British thermal unit and a cap of USD 6.5, tinkering with the panel's suggestions will help the government avoid prices going up right in the middle of general elections next year.

"City gas distributors could reduce prices of compressed natural gas (CNG), used by vehicles, and piped natural gas (PNG), used by homes, by 9-11 per cent, with the government accepting the key recommendations of the Kirit Parikh Committee," Crisil Ratings said. "Had the previous pricing regime continued, prices would have likely risen."

But the government has not acted on the panel's recommendation to fully ..