Gail India subsidiary Mahanagar Gas (MGL) on Friday announced a steep reduction in the retail price of compressed natural gas (CNG) by Rs 8/kg and domestic PNG (piped natural gas) by Rs 5/SCM across its licenced area.

The move comes on the heels of the Centre revising the pricing methodology of domestically-produced natural gas on Thursday as proposed by the Kirit Parikh committee and following it with the new price announcement earlier in the day.

In February, the city gas distributor reduced its CNG price by Rs 2.5/kg. but prices are still around 80 per cent more than those in April last.

MGL is pleased to pass the benefit of the source price reduction in domestic gas cost onto its domestic PNG and CNG consumers. Accordingly, the price of CNG is reduced by Rs 8/kg and domestic PNG is down by Rs 5/SCM in and around Mumbai, a late evening statement from the city gas distributor said.

The revised retail price of CNG will be Rs 79/kg and that of domestic PNG Rs 49/SCM effective from April 7 midnight.

The company said with this CNG is 49 per cent cheaper than petrol and 16 per cent than diesel at current prices in Mumbai, while domestic PNG is 21 per cent cheaper than domestic LPG.

Earlier in day the Centre set domestically produced gas price for April USD6.5/ mmBtu for ONGC and Oil India and at USD7.92 for others.