Cooking food in the kitchens of people living in and around Mumbai has become a bit expensive since Friday. In fact, Mahanagar Gas Limited, the company that supplies PNG (piped natural gas) to households in the city, has increased the price of PNG by Rs 2 per kg since November 22. After the implementation of the new tariff, the price of a kilogram of CNG is now Rs 77. The rise in gas prices comes just days after elections ended in Maharashtra and Jharkhand. The goal of this increase is to reduce rising costs.
Effect of GAIL supply cut
On November 16, city gas companies including MGL, Indraprastha Gas Ltd and Adani Total Gas Ltd reportedly faced supply cuts to their domestic gas allocation by GAIL (India) Ltd, which They ranged between 13% and 20%. At 2:22 pm, shares of Mahanagar Gas Limited were trading at Rs 1,165.50 per share, up 3.57%.
In October there was also a gas outage.
The central government had also cut MGL’s domestic APM gas allocation in October, and CGD players had reacted by saying the decision would hit profits, Moneycontrol reported. The latest gas allocation cut in November increases reliance on expensive options such as spot or imported LNG. This puts pressure on profits and potentially leads to price increases.
PNG or piped natural gas is a form of natural gas that is distributed directly to residential, commercial and industrial consumers through a network of underground pipelines. It is a clean-burning fuel composed primarily of methane and is considered a more environmentally friendly alternative to other conventional fuels.
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