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Effective January 16, 2025, the allocation has risen by 26%, increasing the supply of compressed natural gas (CNG) from 37% to 51%.
“As per the communication received from GAIL (India) Limited (the nodal agency for domestic gas allocation), the domestic gas at APM price to Mahanagar Gas Limited (MGL) has been increased by 26% with effect from 16th January 2025, thus increasing allocation for CNG from 37% to 51%,” Mahanagar Gas said in a regulatory filing.
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“This being a considerable increase in allocation shall have a positive impact on the profitability of the company,” it said.
Last week, the government slashed the allocation of natural gas used for LPG production and diverted the low-priced fuel to city gas retailers like Indraprastha Gas Ltd and Adani-Total Gas Ltd to meet a part of their requirement for CNG/piped cooking gas supplies, according to an official order.
The government had in October and November last year cut supplies of low-priced natural gas coming from old fields such as Mumbai High and Bassein fields in the Bay of Bengal, to city gas retailers by as much as 40% in view of limited output.
This led to city gas retailers hiking CNG prices by ₹2-3 per kg and threatening more increases as they replaced lost volumes with higher-priced input fuel. The price hike made CNG less attractive when compared to alternate fuels like diesel.
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To resolve this, the Ministry of Petroleum and Natural Gas in a December 31 order rejigged some allocations of gas produced from below ground and undersea.
Shares of Mahanagar Gas Ltd ended at ₹1,273.20, up by ₹21.70, or 1.73% on the BSE.
