More cuts in domestic gas supply to CNG firms, IGL says profitability to take hit

Previously, supplies had been chopped by astir 21 per cent effectual October 16.

“Based connected different connection received by the institution from GAIL (India) Ltd (the nodal bureau for home state allocation), this is to pass that determination has been further simplification successful home state allocation to the institution effectual from November 16, 2024. The revised home state allocation to the institution is approx. 20 per cent lesser than erstwhile allocation which volition person an adverse interaction connected profitability of the company,” IGL said.

IGL gets home state allocation for gathering the request of CNG income volumes astatine the pricing fixed by the authorities (presently astatine $6.5 per cardinal British thermal unit).

The alternate to this is to usage imported gas, which is doubly the home rate.

“The institution is exploring each options to code the issue,” IGL said.

IGL exploring each options

Natural state pumped from beneath the crushed and from nether the seabed from sites ranging from the Arabian Sea to Bay of Bengal wrong India is the earthy worldly that is turned into CNG for merchantability to automobiles and piped cooking state to households.

Production from bequest fields, whose terms is regulated by the authorities and which are utilized to provender metropolis state retailers, has been falling by up to 5 per cent annually owed to the earthy diminution that has acceptable in.

This has led to proviso cuts to metropolis state retailers.

While the input state for piped cooking state that households get is protected, the authorities has chopped proviso of earthy worldly for CNG.

Gas from bequest fields utilized to conscionable 90 per cent of the request for CNG successful May 2023 and has progressively fallen.

The proviso was chopped to conscionable 50.75 per cent of the CNG request opening October 16 from 67.74 per cent past month.

Now it has been further reduced.

Buying imported and costlier liquefied earthy state (LNG) to marque up for the shortfall whitethorn pb to a hike successful CNG prices that varies from Rs 4-6 per kg, sources said.

For now, the retailers person not raised CNG rates arsenic they are engaged with the Ministry of Petroleum and Natural Gas to find a solution, they said.

CNG terms hike is besides a governmental contented since Maharashtra goes to the polls adjacent week and elections are besides owed successful Delhi soon.

Delhi and Mumbai are among the biggest CNG markets successful the country.