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Govt's move to cut CNG and PNG prices cheers IGL, MGL and Gujarat Gas investors

Govt's move to cut CNG and PNG prices cheers IGL, MGL and Gujarat Gas investors

Govt's move to cut CNG and PNG prices cheers IGL, MGL and Gujarat Gas investors
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By CNBCTV18.com Aug 11, 2022 4:04:25 PM IST (Updated)

By increasing allocation for city gas operators, the country will be able to meet 94 percent of its demand for gasoline for automobiles and piped gas for cooking. In the past, about 83 percent of the demand was met by GAIL's import of LNG.

Shares of city gas distributors — Gujarat Gas, Mahanagar Gas and Indraprastha Gas — soared after the Central government diverted natural gas from industries to city gas operators to check the spiralling CNG and piped cooking gas prices.

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At 1:59 pm shares of IGL were up by 7.8 percent from the previous close on the BSE. MGL shares were trading at Rs 858, an up of 5.58 percent. Gujarat Gas shares surged by 5.5 percent in the early morning session to Rs 479.5 per share.
According to the news agency PTI, the Ministry of Petroleum and Natural Gas amended an earlier order to increase the allocation of domestically produced gas to city gas operators.
The move follows a massive jump in CNG and PNG prices in the country in the last one year as operators used costlier imported LNG. CNG prices in Delhi went up by a massive 74 per cent (from Rs 43.40 per kg in July 2021 to Rs 75.61 per kg now) while PNG prices rose by 70 per cent (from Rs 29.66 per standard cubic meter to Rs 50.59 per scm).
According to officials, the allocation for city gas operators such as Indraprastha Gas Ltd of Delhi and Mahanagar Gas Ltd of Mumbai has been increased to 20.78 million standard cubic meters per day.
By increasing allocations, the country will be able to meet 94 percent of its demand for gasoline for automobiles and piped gas for cooking. In the past, about 83 percent of the demand was met by GAIL's import of LNG.
Meanwhile, brokerage firm Jefferies has maintained a 'buy' rating on the shares of IGL with a target price of Rs 450. The stock has enough room to raise the price, said the brokerage house.
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