CNG Prices May Rise by ₹5-5.5 Due to Gas Supply Cuts

The supply cuts were needed because the government decided to restore gas supplies to the OPaL petrochemical plant in Dahej, Gujarat.

This plant originally received 4.12 million standard cubic meters of gas each day, but its allocation was reduced to 1.95 mmscmd and was cut even further during the COVID-19 pandemic.

The shortage of promised gas caused problems for OPaL, leading the government to approve a recovery plan. This plan includes a big investment of ₹10,501 crore from ONGC and new gas supplies.

The Union Cabinet has approved 3.44 mmscmd of gas from new ONGC wells, which means there is less gas for city gas companies.

Girish Kadam from Icra Ltd said that city gas supply has been cut by 20%.

This means city gas companies will have to buy more expensive gas or imported LNG, which will raise costs.

To keep making money, CNG prices might go up by about ₹5 to ₹5.5 per kg.

Indraprastha Gas Ltd (IGL) in Delhi and Mahanagar Gas Ltd (MGL) in Mumbai have some important news.

They told everyone that they are getting less local gas than before.

For IGL, their new gas supply is 21% less. This means they will make less money.

MGL also said that the government has rules that say city gas companies should get local gas first.

This gas is mainly used for cooking and for CNG cars.

Adani Total Gas Ltd is also affected. They will get 16% less gas starting from October 16, 2024.