CNG prices may come down by half

Good news for CNG users! CNG prices maybe reduced by 50%. This follows a key agreement between Petronet LNG (liquified natural gas), the largest importer of LNG in India, and the biggest exporter of LNG, Ras Gas of Qatar. This could bring down CNG prices, analysts say. The deal is to lower gas prices from $12 to $13 for MMBTU (one million British thermal units) to between $6 and $7 per MMBTU. The lower revision was signed by Petronet and Qatar gas agency Ras Gas recently. Following the accod, the Indian government would save Rs.12,000 crore, according to Petroleum Minister Dharmendra Pradhan. Not only that, the agreement has validity for 25 years. Under the agreement, Petronet should buy 7.5 million tonnes of liquified natural gas. Petronet had in the past refused to take delivery from Ras gas on the ground of its high prices. Qatar had levied a fine of $1 billion on Petronet. Following subsequent talks, Ras Gas had spared the fine on Petronet. Analysts thus conclude that Petronet profits were going to go up and CNG prices would come down drastically.