CNG may become costlier by 5 to 6 rupees – The Indraprastha Gas Limited (IGL) said that further reduction in domestic gas supply to CNG companies may affect its profit. For the second time in a month, the government has cut the supply of cheap natural gas produced domestically to retail CNG vendors. The company, which retails CNG for vehicles and piped cooking gas to homes in the capital Delhi and nearby cities, informed the stock market that domestic supply has been cut by about 20 percent from November 16, due to which CNG may become costlier by 5 to 6 rupees.
Earlier, the supply was cut by about 21 percent from October 16. IGL said, ‘Based on another information received by the company from GAIL (India) Limited (nodal agency for domestic gas allocation), it is told that domestic gas allocation to the company has been further reduced from November 16, 2024.’ IGL said that the changed domestic gas allocation is about 20 percent less than the previous allocation, which will have a direct impact on the company’s profits. IGL gets domestic gas allocation at the government’s fixed price (current $ 6.5 per million British thermal units). Its option is imported gas, which is twice the domestic rate.
After the supply cut twice in a month and IGL indicating a decrease in profit, the price of CNG may increase in the coming time. In fact, the government has first cut the supply of cheap gas to urban gas distribution companies selling CNG to vehicles by 21 percent and now by 20 percent. After this step of the government, the dependence of companies on expensive imported fuel will increase. To compensate for the reduction in cheap gas, companies will have to buy expensive gas. This can increase the price of CNG.
Rate can increase by 5 to 6 rupees – Recently, when the government cut the supply of cheap natural gas, rating agency ICRA had predicted that companies could increase the retail price by 5 to 6 rupees per kilo. But even after about a month, no change was made in the price. But this time after IGL’s statement came out that this will have a direct impact on its profit. Now the price of CNG can be increased. It is expected that IGL may increase the price of CNG by Rs 5 to Rs 6 to maintain the profit.
