Indraprastha Gas (IGL) and Mahanagar Gas (MGL) have continued to hike the worth of compressed pure gasoline (CNG) and piped pure gasoline (PNG) to recuperate the elevated enter prices after the federal government doubled the home pure gasoline value on April 1. Natural gasoline is used as a uncooked materials to provide CNG and PNG.
IGL on Thursday hiked the worth of CNG by Rs 2.5 per kg to Rs 71.61 per kg, whereas the worth of PNG was raised by Rs 4.25 per normal cubic meter (SCM). PNG will now price Rs 45.86 per unit, up Rs 13.50/kg since January.
MGL, that distributes CNG and PNG in and round Mumbai, additionally hiked the costs efficient from April 13 by Rs 5/kg for CNG to Rs 72/kg and for PNG by Rs 4.5/SCM to Rs 45.50/SCM.
MGL, in a press release, mentioned that other than 110% hike in home gasoline value to $6.1/mmBtu, the price of re-gasified LNG — blended to offset the shortfall in availability of home gasoline — are at traditionally excessive ranges. This mixture has resulted in a big enhance in the price of gasoline being procured by MGL.
“Since the increase in input gas price is significantly high, MGL has decided to progressively recover such increased gas cost.”
Analysts mentioned the below restoration in case of MGL won’t be very excessive since Maharashtra authorities lower the VAT on gasoline from 13% to three% on March 31. “We will have to wait for management commentary to calculate the under recoveries based on amount of LNG is blended to the domestic fuel,” mentioned an analyst with a Mumbai primarily based brokerage.
Traditionally, CNG and PNG have helped folks to alternatively save on petrol, diesel and LPG. However, the continual hike in costs have lowered the advantages for CNG shoppers to 59% on petrol and 31% on diesel at present petrol-diesel value ranges.
In comparability, CNG costs on August 30 had been Rs 45.20/kg and PNG at Rs 30.91/SCM.
On March 31, MGL had introduced a discount in retail value of CNG by Rs 6/kg and piped gasoline by Rs 3.50/SCM, efficient April 1 after Maharashtra authorities lower VAT on the gasoline from 13.5% to three%.
IGL has raised CNG costs by Rs 9/kg since April 1, taking the cumulative hike since January to Rs 16/kg. “Our analysis suggests that IGL is baking in a 7.5% shortfall at $6.1 APM. This gives us comfort on the near term margin outlook for IGL while the discount of CNG to petrol/diesel remains attractive at 59%/47%, helped by higher crude,” Jefferies wrote.
Stating that MAHGL was barely lagging behind however it had room for additional hikes, it added {that a} full VAT discount pass-through adopted by a Rs 7/kg hike makes efficient hike since March 31 at Rs 1/kg which solely bakes in an entire APM allocation at $6.1/mmBtu. “The discount of CNG to petrol/diesel stands at a steep 61%/46% currently, leaving significant room for further likely hikes (given inadequate APM allocation and Oct-22E APM). But a $9.2/mmBtu GCV APM (from October) as well as a 10% perennial APM shortfall would need Rs 21/kg hike in CNG price which could narrow CNG discount to 48%/28% vis-a-vis petrol/diesel, respectively.”
On the opposite hand, Jefferies mentioned sharp CNG value hikes by GUJGA appeared to consider ~ 15% APM gasoline shortfall at $6.1/mmBtu GCV. But the close to time period outlook appears smooth with elevated Spot LNG costs prompting GUJGA to maintain Morbi volumes (~ 60% of regular state volumes) at 40% beneath previous peaks.”
Source: www.financialexpress.com”