Gujarat Gas Limited, a subsidiary of the Gujarat State Petroleum Corporation (GSPC), has announced a price hike of ₹1.50 per kilogram for compressed natural gas (CNG). Effective from December 1, 2024, this increase raises the price from ₹76.26 to ₹77.76 per kilogram.
This marks the third price hike in 2024, following increases of ₹1 on July 24 and August 1. With the latest hike, the cumulative increase in CNG prices this year has reached ₹3.50 per kilogram.
The recent price adjustments coincide with a notable rise in Gujarat Gas Limited’s profits. The company reported a net profit of ₹409.5 crore in the fourth quarter of 2024, up from ₹326 crore in the same period of 2023, reflecting a 25.6% year-on-year growth.
Industry experts attribute the price hikes to a reduction in cheaper domestic gas supplies by the central government. Domestic Administered Pricing Mechanism (APM) gas supplies have been cut by around 50%, forcing distribution companies to procure gas at $9–$10 per unit instead of the earlier $6.50.
Gujarat Gas operates an extensive network of 185 CNG stations in South Gujarat, 221 in the Saurashtra region, 112 in Central Gujarat, 45 in the northern region, and six in the Union Territory of Dadra and Nagar Haveli.
According to the Federation of Gujarat Petroleum Dealers Association (FGPA), the hike will directly affect approximately 12 lakh commercial vehicles, including 4 lakh CNG auto-rickshaws and 6 lakh four-wheelers, as well as public transport buses.
Sources in the oil and gas sector point out that gas consumption typically increases during the winter months. This seasonal demand, combined with reduced availability of lower-cost domestic gas, has created additional pressure on distribution companies.
The price hikes have sparked concerns among vehicle owners and transport operators, as rising fuel costs directly impact their operational expenses. While Gujarat Gas Limited has not announced further adjustments, industry analysts suggest that continued market volatility and domestic gas supply constraints could lead to additional price increases in 2025.
This upward trend in CNG pricing underscores the challenges faced by both distribution companies and consumers in balancing affordability with fluctuating supply costs.