NEW DELHI New Delhi: City gas companies like Indraprastha Gas Ltd and Adani Total Gas Ltd are considering increasing CNG prices after the supply of the cheaper input gas was cut for the second time in a month, but government officials say retail Sellers must provide cost details to justify the increase. The government has cut the supply of cheap natural gas from old sectors to city gas retailers by up to 20 per cent with effect from November 16. This cut comes after a 21 percent cut on October 16.
City gas retailers IGL, which retails CNG in the national capital and surrounding cities, Mahanagar Gas Ltd, which does the same in Mumbai, and Adani Total Gas Ltd, which operates in Gujarat and elsewhere, said in regulatory filings. marked profitability concerns due to supply cuts in the U.S. and hinted at a rise in prices. However, officials at the Ministry of Petroleum and Natural Gas are not happy with this, as they feel retailers operate on “huge” margins and the new slightly higher price than wells They can easily absorb the additional costs they may have to incur if they replace lost volumes with natural gas or imported LNG.
“Take IGL for example. It reported a net profit of Rs 1,748 crore on revenue of about Rs 16,000 crore in the financial year ending March 31, 2024. This is a margin of 11 per cent. MGL has a net profit of Rs 7,000 crore. Profit of around Rs 1,300 crore on revenue. Which retailer earns this much margin?” a senior officer asked. Officials said the government is not against companies making profits, but if they want lower priced inputs (gas from old fields) then they should also declare details of the cost of the final product (CNG).
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