Fourteen increases in seven months, eighty percent since 2021
Across India's cities on an October morning, the cost of cooking a meal and hailing a ride quietly rose — not by chance, but by the logic of global energy markets translated into government policy. A 40% hike in wholesale natural gas prices, the fourteenth such adjustment for CNG since March alone, pushed Delhi's compressed natural gas to Rs 78.61 per kilogram and piped household gas to Rs 53.59 per cubic metre. What appears as a number on a pump or a utility bill is, in truth, the final destination of a long journey: from geopolitical turbulence, through commodity markets, into the daily arithmetic of ordinary lives.
- A 40% government hike in wholesale natural gas — to a record $8.57 per million BTU — sent fuel costs surging across Indian cities simultaneously on October 8th.
- For Delhi commuters and households, this was no isolated shock: CNG has now risen 14 times since March, accumulating an 80% price increase since April 2021.
- Utilities like Indraprastha Gas and Mahanagar Gas had no buffer to absorb the costs, passing increases directly to auto-rickshaw drivers, taxi operators, and families cooking at home.
- The pain spread unevenly across cities — Kanpur CNG hit Rs 89.81/kg, Ajmer Rs 88.88, Mumbai Rs 86 — each number a local expression of the same upstream pressure.
- The government's twice-yearly pricing mechanism, anchored to a 12-month average that captured a period of global energy turmoil, means the next adjustment cycle is already in motion.
On the morning of October 8th, price boards at gas stations across Delhi quietly changed. Compressed natural gas — the fuel that moves thousands of auto-rickshaws and taxis through the city — rose to Rs 78.61 per kilogram, up three rupees. Piped cooking gas climbed by the same amount, reaching Rs 53.59 per standard cubic metre. The increases arrived without fanfare, a direct consequence of decisions made far upstream.
The numbers carried weight beyond the single day. For CNG, it was the fourteenth price increase since March — a string of hikes that had added Rs 22.60 per kilogram in seven months alone. Measured from April 2021, the cumulative rise stood at Rs 35.21 per kilogram, an eighty percent climb. Piped cooking gas told a similar story: ten increases since August 2021, a cumulative rise approaching ninety-one percent.
The root cause was a government decision on October 1st to raise the wholesale price of natural gas by forty percent, pushing it to a record $8.57 per million BTU. Gas from newer deep-sea fields climbed even higher, to $12.6 per million BTU. These wholesale shifts moved immediately through the supply chain to consumers.
The pattern repeated across the country. Gurugram saw CNG reach Rs 86.94 per kilogram; Kanpur hit Rs 89.81. In Mumbai, Mahanagar Gas had already acted, raising CNG by Rs 6 to Rs 86 per kilogram. The mechanism behind it all — a government formula adjusting prices twice yearly based on a trailing 12-month global average — had captured a period of acute international energy turbulence. For the commuter or the household cook, the result was simply a higher number, arrived at by forces well beyond the city's edge.
On Saturday morning, October 8th, the price board at gas stations across Delhi ticked upward. Compressed natural gas, the fuel that powers thousands of auto-rickshaws and taxis through the city's streets, jumped to Rs 78.61 per kilogram—a three-rupee increase from the previous rate of Rs 75.61. At the same moment, piped natural gas flowing into household kitchens rose by the same amount, climbing to Rs 53.59 per standard cubic metre from Rs 50.59. The increases came without warning, a direct pass-through of decisions made in government offices about the price of the commodity itself.
These were not small adjustments. For CNG, it marked the first price increase in more than four months, breaking a period of relative stability. For the cooking gas piped into homes, it was the first rise in two months. But the real story lay in the accumulation. Since March 7th of that year, CNG prices had climbed fourteen separate times. The most recent jump before this one had come on May 21st, a two-rupee hike. Taken together, those fourteen increases had added Rs 22.60 to the per-kilogram price in just seven months. Stretch the view back further—to April 2021—and the picture became stark: CNG had risen by Rs 35.21 per kilogram, an eighty percent jump. For piped cooking gas, the numbers were even more severe. Ten price increases since August 2021 had pushed the cumulative rise to Rs 29.93 per standard cubic metre, nearly a ninety-one percent climb.
The immediate cause was clear. On October 1st, the government had raised the price it charged for natural gas by forty percent, pushing it to a record $8.57 per million British thermal units. For gas drawn from older, established fields—which supplied roughly two-thirds of the country's natural gas—the price jumped from $6.1 to $8.57. For gas from newer, more difficult-to-extract fields, including the deep-sea operations run by Reliance Industries and its partner BP in the KG Basin, the price climbed even higher, to $12.6 per million BTU from $9.92. These wholesale price changes rippled immediately downstream to the consumer.
Indraprastha Gas Ltd, the utility that retails both CNG and piped cooking gas in Delhi and surrounding cities, had no choice but to pass the increases along. The same pattern unfolded across the region. In Gurugram, CNG rose to Rs 86.94 per kilogram. In Noida, Greater Noida, and Ghaziabad, it reached Rs 81.17. Ajmer saw prices climb to Rs 88.88 per kilogram, while Kanpur hit Rs 89.81. The increases were not confined to the capital region. In Mumbai, Mahanagar Gas had already moved first, raising CNG by Rs 6 per kilogram and piped cooking gas by Rs 4 per standard cubic metre, bringing CNG to Rs 86 per kilogram and domestic PNG to Rs 52.50 per scm.
The timing of these increases was governed by a government mechanism that adjusted natural gas prices twice yearly—once on April 1st and again on October 1st. The October adjustment was based on the average price of natural gas during the preceding twelve months, from July 2021 through June 2022. That averaging period had captured a period of global energy market turbulence, with prices rising sharply in the wake of geopolitical tensions and supply constraints. The consumer, sitting at home or hailing a taxi, felt the result as a fait accompli, a price set by forces far beyond the city limits.
Citações Notáveis
The government revises gas prices twice a year—from April 1 to September 30 and from October 1 to March 31, with the October rate based on the average price from July 2021 to June 2022.— Government pricing mechanism
A Conversa do Hearth Outra perspectiva sobre a história
Why does the government set natural gas prices only twice a year? Why not adjust them monthly, or let the market decide?
The twice-yearly cycle creates some predictability for utilities and consumers. If prices moved every month, the administrative burden would be constant, and people couldn't plan their budgets. But the trade-off is that when global prices spike—as they did in 2021 and 2022—the increases hit all at once, in big chunks.
So the person buying CNG for their auto-rickshaw in May had no idea what was coming in October?
Exactly. They saw the May increase, thought maybe things were stabilizing, and then October hit with a forty percent jump in the wholesale price. That's the cost of the system—stability in timing, but shock in magnitude.
The numbers show CNG up eighty percent since April 2021. That's enormous. How do people absorb that?
They don't, not easily. For a taxi driver or someone using CNG for cooking, that's a direct hit to income or household budget. Some people switch fuels if they can, some cut back on travel, some just absorb the cost. But there's no escape valve—the price is set by government policy, not by what people can afford.
Is there any sign this will reverse, or are we in a new price regime?
The government's pricing is tied to global natural gas markets, which remain volatile. The next adjustment comes in April 2023, based on prices from the previous nine months. If global prices fall, Delhi prices could fall. But if they stay high or rise further, the cycle continues. There's no mechanism to cushion the blow.