CNG Supply Cut Sparks Concerns Amid Elections

The government has again cut cheaper domestic natural gas supply to CNG retailers, impacting profitability. Indraprastha Gas Ltd cites a 20% reduction from November 16, worsening supply already cut in October. As demand continues, a switch to more costly imported gas could lead to a price hike.

The government has once more reduced the supply of affordable domestic natural gas to CNG retailers, raising alarms over potential impacts on profitability. According to Indraprastha Gas Ltd, the domestic supply has been slashed by about 20% as of November 16.

This recent cut compounds the previous reduction of 21% in October, straining the company's ability to meet CNG demand. The company indicated reliance on imported gas, which is double the domestic rate, might be necessary, potentially leading to increased prices.

Natural gas from local fields has been declining annually by about 5%, causing periodic supply cuts. Currently, political implications loom large as CNG prices are sensitive issues in upcoming elections in key markets like Delhi and Mumbai.

(With inputs from agencies.)