The government has prioritized gas supply for household PNG and CNG, which may lead to a significant curtailment for industrial users. This decision could have far-reaching implications for companies like Indraprastha Gas Limited (IGL), Mahanagar Gas Limited (MGL), and Gujarat Gas Limited.

Gujarat Gas has approximately 49% of its total volume supplied to industrial and commercial consumers, making it particularly vulnerable to supply disruptions. In contrast, MGL and IGL have 16% and 13% of their total gas distribution allocated to these segments, respectively.

Analysts from Nomura estimate that a 20% curtailment in gas supply to industrial and commercial segments could impact both MGL and IGL by around 3% on volumes. However, Gujarat Gas is projected to face a more substantial impact of around 10% due to its higher exposure to the industrial and commercial sector.

The situation in Noida, where the minimum waiting period for booking a domestic LPG cylinder refill has increased to 25 days from 21 days, highlights the growing concerns over gas supply. Noida has around 10 lakh LPG connections, while Ghaziabad has 12 lakh connections, with approximately 8,000 in Noida and 15,000 in Ghaziabad classified as commercial.

Despite these challenges, the supply of PNG and CNG in the region has continued without interruption. The gas supply network in western Uttar Pradesh is connected to the Hazira-Vijaipur-Jagdishpur pipeline operated by GAIL (India) Limited, which has been crucial in maintaining supply.

Authorities have issued directions to ensure that domestic consumers do not face inconvenience in LPG supply, reflecting the government’s commitment to prioritizing household needs amid the ongoing supply challenges. However, the long-term effects of this policy on industrial users remain to be seen.

Details remain unconfirmed regarding how long the curtailment will last and its full impact on the market. Observers are closely monitoring the situation as it develops, particularly for companies like IGL and MGL that are heavily reliant on industrial gas supply.

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