Days after the Centre announced that natural gas prices would be increased by 40 percent, Mahanagar Gas which supplies CNG to Mumbai and surrounding areas increased its retail price by Rs 6 per kilogram to Rs 86 beginning Tuesday. 

In a statement, the company said that in addition to the spike in natural gas price, the allocation of administrative price mechanism (APM) gas to it has been concurrently reduced by 10 percent, prompting it to source gas at a substantially higher cost in order to cater to the increasing requirements.

It has led to an escalation in the input costs, thereby forcing the company to increase CNG's retail price. The devaluation of the rupee via-a-vis the US dollar has also added to its  problems, the company added before saying that despite the price increase, CNG still remains attractive as automotive fuel offering 45 percent savings when compared to petrol at current price level in Mumbai which stands at Rs 106.31 per litre. 

The last price hike came into effect in 12 July.

The APM gas price which is declared by the government is primarily given for social sectors such as mobility, power generation and fertilisers. It is relatively cheaper than non-APM gas price which is for the free markets. Local taxi and autorickshaw fares have also been increased as a result.