As Europe braces for a harsh winter triggered by a shortage of gas from Russia as it turns up the hate in Ukraine, natural gas prices are increasing globally. Earlier this month, India had to pay double for Liquified Natural Gas, after shipments from a subsidiary of Russia’s Gazprom meant for India, were diverted to Europe. A day after Sweden discovered a leak in an undersea pipeline that supplies gas to Europe, prices of natural gas are up by 40 per cent.
How does it affect your household bills?
As a shortfall of LNG already threatens power generation, fertilisers and other sectors in India, record natural gas prices will make cooking gas and CNG pricier. Carmakers have significantly reduced the production of CNG-powered vehicles and cut down sales targets by almost two lakh units or 30 per cent for the current fiscal year. Even before natural gas prices had hit record levels, the CNG rates in India were expected to go up by Rs 15 in October.
The latest development will also hit households since piped cooking gas will also become more expensive. This can disrupt the plans to increase coverage of piped cooking gas to 98 per cent of India’s population. The Indian government also had to divert gas from industries to households via NGL and IGL to tackle the rising prices of CNG and cooking gas. This can have adverse effects for industrial development and the overall economic growth of India in the longer run.
Can affect India’s gas economy ambitions
As India looks to increase the share of gas in its energy supply to 15 per cent by 2030, the gas and power rates across Europe are expected to remain high till 2025, as a result of the Russia-Ukraine conflict and the post-pandemic recovery. Considering that everything from fertiliser to electricity depends on natural gas, the effects of rising prices will be visible in every walk of life.