Gas Supply Prioritization Affects Industrial Users
The government has prioritized gas supply for household PNG and CNG, potentially curtailing supply for industrial users. This decision could have significant repercussions for companies like Indraprastha Gas Limited (IGL), Gujarat Gas Limited, and Mahanagar Gas Limited.
Gujarat Gas has approximately 49% of its total volume supplied to industrial and commercial consumers, making it particularly vulnerable to supply disruptions. In comparison, Mahanagar Gas Limited and Indraprastha Gas Limited have 16% and 13% of their total gas distribution allocated to these segments, respectively.
Analysts from Nomura estimate that a 20% curtailment in gas supply to industrial and commercial segments could impact MGL and IGL by around 3% each on volumes. However, Gujarat Gas is likely to face a much larger impact of around 10% on volumes due to its higher exposure to the industrial and commercial segment.
In Noida, the minimum waiting period for booking a domestic LPG cylinder refill has increased to 25 days from 21 days, reflecting the strain on supply chains. Noida has around 10 lakh LPG connections, while Ghaziabad has 12 lakh connections, with a portion classified 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 operated by GAIL (India) Limited, which has been crucial in maintaining service levels.
Authorities have issued directions to ensure that domestic consumers do not face inconvenience in LPG supply, highlighting the government’s commitment to prioritizing household needs amid the ongoing supply issues.
As the situation develops, observers are closely monitoring the potential impacts on IGL and other gas distribution companies. Details remain unconfirmed regarding the full extent of the curtailment’s impact on industrial users and future supply adjustments.
