If you drive a CNG car, then you need to re-make your budget. CNG prices may increase in the coming days. The reason for this is the government's decision to cut the supply of domestic quota gas to gas companies within a period of one month. The government first cut it on 16th October and now it is going to be cut once again from 16th November.
Indraprastha Gas Limited (IGL), which supplies CNG and PNG in Delhi-NCR, says that cutting the domestic gas supply of companies will affect their profitability. The government has cut this supply twice in a row.
The government's cut in domestic gas supply will have an impact on the financial health of companies. If their profitability decreases, the companies will be forced to compensate it from the customers. The domestic supply quota of companies supplying PNG to homes and CNG to vehicles has now been reduced by 20 percent. Whereas earlier on October 16, it was reduced by 21 percent.
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Gas companies find it cheaper to supply domestically produced gas. In this way their overall costs reduce and they are able to supply PNG and CNG to the people at lower prices. Whereas in return for this reduction, they will have to buy gas imported from abroad, which is expensive.
IGL says that according to the information sent by GAIL (India) Limited, the gas supplied to the gas companies from the quota of domestic gas supply has been reduced from November 16, 2024. This is about 20 percent less than the previous allocation. This will adversely affect the company's profits.
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IGL currently gets domestic gas allocation at a government fixed price of $6.5 per million British thermal units (MBTU). Its alternative is imported gas, the price of which is double the price of domestic gas.
