Impact on Gas Supply
The government’s recent decision to prioritize gas supply for household PNG and CNG has raised concerns about potential curtailments for industrial users. Analysts from Nomura estimate that a 20% reduction in gas supply to industrial and commercial segments could lead to a 3% decline in volumes for both Mahanagar Gas Limited (MGL) and Indraprastha Gas Limited (IGL).
Gujarat Gas Limited, which supplies approximately 49% of its total volume to industrial and commercial consumers, is expected to face a more significant impact, with estimates suggesting a 10% reduction in volumes.
Current Supply Situation
In the context of domestic LPG supply, the minimum waiting period for booking a refill in Noida has increased to 25 days, up from 21 days. This change affects around 10 lakh LPG connections in Noida and 12 lakh in Ghaziabad, with approximately 8,000 connections in Noida and 15,000 in Ghaziabad categorized 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.
Government Response
Authorities have issued directives to ensure that domestic consumers do not experience inconvenience in LPG supply, reflecting the government’s commitment to maintaining essential services amidst the curtailment of industrial gas supply.
The prioritization of gas for household use may lead to a scarcity of gas for industrial and commercial applications, impacting companies like IGL, MGL, and Gujarat Gas. Observers are closely monitoring the situation as further developments unfold.
Details remain unconfirmed regarding the long-term implications of these supply changes on the gas market and the affected companies.
