Gas Supply Prioritization Affects IGL and Others
The government has decided to prioritize gas supply for household PNG and CNG, which may lead to a significant curtailment for industrial users. This shift could impact companies like Indraprastha Gas Limited (IGL), Mahanagar Gas Limited (MGL), and Gujarat Gas Limited.
Gujarat Gas has approximately 49% of its total volume supplied to industrial and commercial consumers, making it particularly vulnerable to the changes. In contrast, Mahanagar Gas Limited has around 16% and Indraprastha Gas Limited about 13% of their total gas distribution allocated to these segments.
Analysts from Nomura estimate that a 20% curtailment in gas supply to industrial and commercial segments could result in a 3% impact on volumes for both MGL and IGL. However, Gujarat Gas is expected to face a more significant challenge, with an estimated 10% impact on its volumes due to its higher exposure to the industrial and commercial sectors.
In Noida, the minimum waiting period for booking a domestic LPG cylinder refill has increased to 25 days, up from 21 days. This change affects the approximately 10 lakh LPG connections in the area, alongside 12 lakh connections in Ghaziabad, where around 15,000 are classified as commercial.
Despite these challenges, the supply of PNG and CNG in the region has continued without interruption. The gas supply network in western Uttar Pradesh is connected to the Hazira-Vijaipur-Jagdishpur pipeline, which is operated by GAIL (India) Limited.
Authorities have issued directives to ensure that domestic consumers do not face inconvenience in LPG supply, aiming to mitigate the impact of the curtailment on households.
The government’s decision to prioritize gas supply for essential segments may lead to a scarcity of gas for industrial and commercial use, raising concerns among stakeholders in the energy sector.
Details remain unconfirmed regarding the long-term implications of these changes on the overall gas supply landscape and the affected companies.
