IGL shares rise by 4.5% after announcing 4th CNG price hike in Delhi NCR in two weeks

Shares of Indraprastha Gas Limited (IGL) shot up by 4.57% during today's session after it announced another hike in Compressed Natural Gas (CNG) rates in Delhi-NCR. The stock was trading at ₹167.81 apiece at the time of reporting. 

CNG prices were increased by ₹2 from Tuesday, adding on the the ₹1 hike that was announced on Saturday. This is the fourth time that the prices have been increased in the span of less than two weeks. The total increase in prices has been ₹6 per kg since May 15.

Customers will now pay ₹91.70 per kg for CNG, ₹88.12 per kg in Gurugram, and ₹92.44 per kg in Ajmer. 

Why is CNG facing price hikes?

Like petroleum, both compressed natural gas (CNG) and liquefied petroleum gas (LPG) are facing similar disruptions due to the ongoing geopolitical tensions pertaining to global trade routes. 

As the Strait of Hormuz acts as a major route for energy supplies, its closure has impacted prices. 

Other city distributors also are affected. Mahanagar Gas Ltd (MGL), the largest city-gas distributor of Mumbai, was called to discontinue all support schemes and subsidies for their commercial customers with immediate effect on Monday, May 25. 

The company mentioned "ongoing geopolitical situation and its impact” as the reason for this move. 

Centre assures uninterrupted supply

On Monday, the Centre said that India continues to maintain adequate supplies of petroleum products and fertilisers despite disruptions caused by the ongoing West Asia conflict while also stepping up measures to secure energy supplies and support domestic demand. 

Sujata Sharma, Joint Secretary, Ministry of Petroleum, said the conflict has impacted India’s imports, given the country’s dependence on the region for crude oil, LPG, and natural gas. 

“About 40% of crude imports, 90% of LPG imports, and nearly 65% of natural gas supplies are linked to the region. However, every effort is being made to ensure smooth domestic availability of petroleum products,” she said.  

To stabilise supplies, refinery LPG production has been increased to around 50,000 tonnes per day. Sharma said nearly 7.99 lakh PNG connections have already been gasified while infrastructure for another 2.87 lakh connections is ready. More than 8.27 lakh consumers have also registered for PNG connections. 

On domestic LPG distribution, she said around 1.72 crore cylinders were delivered over the last four days against bookings of 1.66 crore cylinders, with 95% of deliveries completed using authentication codes. LPG distributors also operated on Sunday to ensure uninterrupted supply.