After Petrol, Diesel, CNG Prices Hiked In Delhi By Rs 2 Amid Hormuz Blockade

CNG Price Hike: After petrol and diesel, compressed natural gas (CNG) prices have been hiked by Rs 2 amid Hormuz blockade. The price in Delhi has been raised by Rs 2 per kg -- from Rs 77.09 per kg to Rs 79.09 per kg -- amid global energy market disruptions linked to the ongoing Iran conflict.. 

This comes a day after Mahanagar Gas Limited (MGL) raised CNG prices across the Mumbai Metropolitan Region (MMR) by Rs 2 per kg. "Starting midnight tonight, the price of CNG will increase by Rs 2 per kg, bringing the revised rate to Rs 84 per kg in and around the city," said an MGL official on Wednesday evening.

The hike in CNG prices directly hits public transportation. As most of the public transport is now run on CNG, the hike will burn the pockets of daily commuters. In fact, following the rise in CNG price, autorickshaw unions in Mumbai demanded a fare hike as well. The autorickshaw unions are pressing for a Re 1 hike in the base fare of Rs 26.

Petrol, Diesel Price Hike

Petrol price was hiked to Rs 97.77 per litre from Rs 94.77 in the national capital. Diesel now costs Rs 90.67 as against Rs 89.67 per litre previously. Petrol prices in Kolkata, Mumbai, and Chennai now stand at Rs 108.74, Rs 106.68, and Rs 103.67, respectively. Similarly, disel will now cost Rs 95.13 in Kolkata, Rs 93.14 in Mumbai, and Rs 95.25 in Chennai.

CNG Price Hike: Impact On Inflation

A CNG price hike directly fuels inflation by raising transportation and logistics costs. Earlier this week, milk prices were also increased. Any rise in the prices of such essential commodities erodes household savings and reduces people's discretionary spending power, thereby weighing on economic growth.

The logic is straightforward: when prices rise, real consumption tends to slow. Lower consumption, in turn, dampens production. As production weakens, overall economic growth (GDP) also comes under pressure.

However, this growth-inflation trade-off was largely inevitable. Global crude oil and gas prices have surged due to the ongoing Iran war, making domestic prices unsustainable. As a result, a portion of the cost increase had to be passed on to consumers.