Gujarat Gas Announces Third CNG Price Hike in 2024

Ahmedabad : In a move affecting approximately 22 lakh compressed natural gas (CNG) vehicle owners in Gujarat, Gujarat Gas Limited, a subsidiary of Gujarat State Petroleum Corporation (GSPC), has announced a price increase of ₹1.50 per kilogram. Effective December 1, 2024, the price of CNG will rise from ₹76.26 to ₹77.76 per kilogram.

As per the report, this marks the third price hike by Gujarat Gas Limited this year, following increases of ₹1 each on July 24 and August 1. The cumulative hike in 2024 now totals ₹3.50 per kilogram, adding to the financial burden of vehicle owners across the state.

Rising Costs Amid Profit Growth

Gujarat Gas Limited’s decision to raise prices comes as the company reports robust financial performance. The company posted a net profit of ₹409.5 crore in Q4 2024, a 25.6% year-on-year increase from ₹326 crore in the same quarter of 2023.

Industry experts point to reduced access to cheaper domestic gas as a major driver of the price hike. The central government has cut domestic Administered Pricing Mechanism (APM) gas supplies by 50%, forcing distributors to procure gas at international rates of $9–$10 per unit, compared to the earlier $6.50.

Statewide Impact of Price Increase

The hike will directly affect approximately 12 lakh commercial vehicles in Gujarat, including 4 lakh auto-rickshaws, 6 lakh four-wheelers, and public transport buses. Gujarat Gas operates an extensive network of CNG stations, with 185 in South Gujarat, 221 in Saurashtra, 112 in Central Gujarat, 45 in the northern region, and six in Dadra and Nagar Haveli.

According to the Federation of Gujarat Petroleum Dealers Association (FGPA), commercial vehicle operators are particularly vulnerable, as rising fuel costs eat into their profit margins and increase transport costs for goods and passengers alike.

Seasonal Trends and Market Pressures

The winter months typically see higher gas consumption, adding further pressure to supply chains already strained by reduced domestic gas availability. Market analysts suggest this seasonal demand could exacerbate price increases in early 2025 if domestic gas supplies remain constrained.

Public Reaction and Future Outlook

The price hike has sparked widespread concern among vehicle owners and transport operators, with many questioning the affordability of CNG as a fuel alternative. While Gujarat Gas Limited has not announced any immediate plans for further increases, ongoing market volatility and supply challenges hint at a possibility of additional hikes next year.