Gas Supply Curtailment Impact
The government’s recent decision to prioritize gas supply for household PNG and CNG has raised concerns about the potential curtailment of supply for industrial users. This shift could significantly impact companies like Indraprastha Gas Limited (IGL), Mahanagar Gas Limited (MGL), and Gujarat Gas Limited, which rely heavily on industrial and commercial consumers.
Gujarat Gas, for instance, supplies approximately 49% of its total volume to industrial and commercial consumers. In comparison, Mahanagar Gas Limited and Indraprastha Gas Limited distribute around 16% and 13% of their total gas to these segments, respectively. Analysts from Nomura estimate that a 20% curtailment in gas supply could lead to a 3% impact on volumes for both MGL and IGL.
However, Gujarat Gas is likely to face a more substantial impact, with an estimated 10% reduction in volumes due to its higher exposure to the industrial and commercial sectors. This situation underscores the delicate balance between meeting household energy needs and supporting industrial activity.
In Noida, the minimum waiting period for booking a domestic LPG cylinder refill has increased to 25 days, up from 21 days. With around 10 lakh LPG connections in Noida and 12 lakh in Ghaziabad, the demand for LPG remains high. Approximately 8,000 of these connections in Noida and 15,000 in Ghaziabad are classified as commercial.
Despite these challenges, the supply of PNG and CNG in the region has continued without interruption, as authorities have issued directives to ensure that domestic consumers do not face inconveniences in LPG supply. The gas supply network in western Uttar Pradesh is connected to the Hazira-Vijaipur-Jagdishpur pipeline operated by GAIL (India) Limited, which plays a crucial role in maintaining supply stability.
The government’s decision to prioritize essential segments may lead to a scarcity of gas for industrial and commercial use, raising questions about the long-term implications for these sectors. Observers are closely monitoring the situation as authorities work to balance supply and demand in the face of increasing consumer needs.
Details remain unconfirmed regarding the full extent of the impact on IGL and other companies as the situation evolves. Stakeholders are awaiting further updates on how these changes will affect gas distribution and availability in the coming weeks.
