Production from legacy fields, whose price is regulated by the government and which are used to feed city gas retailers, has been falling by up to 5 per cent annually due to natural decline that has set in.

Natural gas extracted from various sites across India, including the Arabian Sea and the Bay of Bengal, is the primary raw material for producing CNG and piped cooking gas for households

In order to mitigate price impact, the government may opt for a cut in excise duty on CNG. Currently, the central government levies a 14% excise duty on CNG, which translates into Rs 14-15 per kg.

Natural gas pumped from below the ground and from under the seabed from sites ranging from the Arabian Sea to Bay of Bengal within India is the raw material that is turned into CNG for sale to automobiles and piped cooking gas to households.

The government has slashed by up to 20 per cent the supplies of cheaper domestically produced natural gas to city retailers -- a move that may result in Rs 4-6 per kg hike in the price of CNG sold to automobiles,