New Delhi, Aug 17 (IANS): CNG and piped natural gas prices could fall further this festive season, with price of domestically produced gas expected to come down in October by about 20 per cent to less than $2 per million British thermal unit.

Sources in the government said that Covid-19 has severely impacted demand conditions in the market and has also affected gas prices globally. Gas prices have fallen by over 50 per cent in last few months and continued to remain suppressed.

This has paved the way for further reduction in domestic gas prices that are revised twice every year - on April 1 and then on October 1. Following global developments, prices had already fallen sharply in last two revision cycles and if the trend continues, it would be third consecutive cycle of gas price fall in the country.

In April this year, the price of natural gas was cut by 26 per cent, bringing it to $2.39 per MBtu.

Reduction in gas prices is good news for consumers as it would have impact on CNG prices that is used for transportation and also piped gas supplies to households. Lower gas prices would also lower the cost for power projects being run on domestic gas and fertiliser plants.

But they spell bad news for state-owned oil and gas producer ONGC as it would mean further suppressed margins and losses. The company is set to lose close to Rs 6,000 crore on low gas prices this year, brokerages have said.