With the cost of natural gas increasing by a steep 40 per cent from this month on top of a steeper 110 per cent hike during April-September, volume growth is seen more than halving to 8-10 per cent this fiscal from the earlier forecast of around 25 per cent, says a report.

Rating agency Crisil sees industrial consumers switching to other cheaper fuels leading to a demand compression of 10-12 per cent this fiscal, while piped cooking gas demand may fall to 8-10 per cent from an earlier projection of 20-25 per cent as prices since the beginning of this fiscal skyrocketed by 150 per cent.

Based on the administered pricing formula, the oil ministry had on September 30 increased price of natural gas by 40 per cent to an all-time high of USD 8.57 per mmbtu (metric million British thermal unit) for the second half of the current fiscal. And this hike was after a massive 110 per cent jack-up in the price for the first half ending September.

 Gas under the administered pricing mechanism is supplied largely to CNG and domestic piped natural gas consumers, who contribute to 50 per cent and 10 per cent of city gas volume,

respectively. The price for the balance 40 per cent of city gas volume, supplied to industries, have also surged and remain elevated since the

Ukraine war.

 Over the past 12 months, the average price of liquefied natural gas (LNG) contracts, benchmarked against crude oil prices, rose 45 per cent to $ 14.5-15 per mmbtu, while spot LNG prices have surged 150 per cent to $ 38-40/mmbtu.