National Fuel Gas Distribution Corp. on Thursday announced a 4.2 percent hike in natural gas costs for its residential customers.

The rate increase means the typical customer's monthly bill will rise to $99.46 from $95.42. The hike, effective last Monday, is a quarterly adjustment on the price NFG pays for gas. Utilities are allowed to update gas rates each quarter.

By law, a utility can't earn a profit on what it pays for gas. Instead, a utility like NFG generates profits on the amount of gas it distributes through its lines and basic service fees.

"During the past three months, customers have actually been paying less for gas than what the company has paid to obtain it for them,'' said Sandra L. James, NFG's assistant director of corporate communications. "National Fuel is required by law to pass gas costs on to customers, dollar for dollar. However, it is reasonable to assume that this increase will have minimal impact on customers' bills due to the warmer weather.''

Gas prices increased nationwide because of colder-than-normal temperatures throughout most of the country, Mrs. James said. That resulted in higher gas prices.

In February, NFG forecast a 3.8 percent decrease for purchased gas costs in its annual state-required filing. That increase is to become effective Aug. 1, but the rate may change due to market trends for gas prices.

NFG previously filed a request to hike its service costs effective June 15. The company said it's the first time in eight years it has asked for an increase on service costs.

NFG serves about 214,000 customers in 14 northwestern Pennsylvania counties, including Mercer County.