The Indian government's decision to decrease domestic gas allocation has led to a 21% reduction in supply for IGL and 20% for MGL, causing a potential increase in the cost of natural gas for consumers. This move has been made to bridge the gap between the lower APM gas price and higher LNG prices, affecting the profitability of the gas distribution companies. However, to minimize the impact, the CGD firms aim to pass on the increased cost to their consumers. This decision has already caused a decline in the share prices of IGL and MGL.
Government's Decision to Cut Gas Allocation Impacts City Gas Distributors
The Government of India's recent decision to reduce domestic gas allocation has had a significant impact on the operations of city gas distribution (CGD) companies, including Mahanagar Gas (MGL) and Indraprastha Gas (IGL).
Background
Previously, CGD companies received a fixed allocation of domestic gas at a subsidized rate. However, to address the widening gap between the subsidized domestic gas price and the higher international liquefied natural gas (LNG) prices, the government has decided to reduce domestic gas allocation to CGD firms.
Impact on CGD Companies
The reduction in domestic gas allocation has led to a 21% decrease in supply for IGL and a 20% reduction for MGL. This has forced them to procure a larger proportion of their gas from the costlier LNG market. As a result, they are facing increased input costs, which could potentially lead to higher prices for consumers.
Government's Rationale
The government's decision is aimed at bridging the gap between the lower domestic gas price and the higher LNG prices. By reducing domestic gas allocation, the government hopes to encourage CGD companies to pass on the increased costs to consumers, thereby reducing the government's subsidy burden.
Impact on Shareholders
The news of the reduced gas allocation has negatively impacted the share prices of IGL and MGL. Investors are concerned about the potential impact on the profitability of these companies, as well as the potential for higher gas prices for consumers.
Top 5 FAQs
1. Why did the government reduce gas allocation to CGD companies?
To bridge the gap between the subsidized domestic gas price and the higher international LNG prices.
2. What has been the impact on IGL and MGL?
A 21% reduction in gas supply for IGL and a 20% reduction for MGL, leading to increased input costs and potential price increases for consumers.
3. How are CGD companies responding?
Aiming to pass on the increased costs to their consumers to minimize the impact on their profitability.
4. What is the government's goal?
To reduce government subsidy burden and encourage consumers to switch to cleaner fuels.
5. What is the potential impact on consumers?
Potential increase in natural gas prices for consumers.
Rubics Group has made a major move into Mumbai's high-end real estate market by announcing their bold debut with the sponsorship of Lionel Messi's G.O.A.T. India Tour 2025. The renowned Rubics Group has entered into the market with their new venture, Rubics Realty, which will bring world-class properties to Mumbai. This collaboration with Messi, arguably one of the greatest football players of all time, is expected to bring a whole new level of excitement and luxury to the Indian real estate market.
The Springfield News-Sun, a trusted local news source, offers a variety of tools to help readers stay informed and engaged with their community. The online subscriber portal allows for easy account management, including options to start a delivery hold and view and pay bills. Additionally, dedicated customer service staff are available to help with any questions or issues. Invest in local journalism and stay connected with the Springfield News-Sun.
The renowned Rubics Group is making strides in the luxury real estate market with the launch of their new brand, Rubics Realty, in Mumbai. This move coincides with their sponsorship of the highly anticipated G.O.A.T. India Tour 2025, featuring superstar Lionel Messi. According to Rubics Group's Managing Director Suhan Shetty, this partnership reflects their ambition to redefine premium property markets and offer clients a sophisticated lifestyle upgrade. Fans can look forward to meeting Messi and reliving memorable moments from his legendary career during the tour.
A recent investigation launched by the Securities and Exchange Board of India (SEBI) has sparked concerns for investors of Quant Mutual Fund. The company's significant increase in AUM has caught the attention of authorities, leading to suspicion of front-running practices. If proven, this could result in reduced returns for investors and potential redemptions, highlighting the importance of fair trade practices in the financial industry.
As part of its 2025 impact report, cycling brand Rapha has announced ambitious targets to increase its use of sustainable materials and reduce emissions across its operations and supply chain by 2030. This includes a commitment to using 80% recycled polyester in its garments and offering a trade-in program for its clothing. While cycling may produce few emissions, Rapha's actions aim to address the environmental impact of the entire supply chain in the industry.
BR and Bar & Bench have joined forces to introduce India's pioneering Generative Artificial Intelligence (Gen AI) programme for legal professionals. Renowned economist David Deming highlights the increasing role of AI in routine lawyer tasks, making it essential for lawyers to acquire AI skills for future success. The highly in-demand skills can enhance precision, speed, and strategy for Indian lawyers, with over 25 AI tools at their disposal. With the 3rd batch starting soon, only limited seats are available for this exclusive 3-month programme, including live sessions and access to session recordings. Secure your seat now to stay ahead in the rapidly changing legal world.
Amid struggles in ratings and ad dollars, CBS News' parent corporation, Paramount Global, announced layoffs and programming changes in an effort to cut costs. The changes include the cancellation of two companion programs and the scaling back of a unit focused on race and culture coverage. The company also plans to have weekday producers take over the operations of the Saturday morning broadcast.
In response to the rising demand for air travel, India's aviation regulator DGCA is introducing revised regulations for wet-leasing of aircraft by domestic airlines. The move aims to provide better oversight and facilitate smoother functioning for carriers managing leased fleets. With airlines facing delays in aircraft deliveries due to supply chain challenges, wet-leasing has become a popular option, but the current regulations have limitations. Through consultations with stakeholders, DGCA is making changes to address these limitations and support the growth of the aviation sector.
In 2025, Bonk, Inc. underwent a major transformation, clearing its debt and establishing new, high-margin revenue streams. As a result, the company is projecting 100% year-over-year revenue growth in 2026, with contributions from its digital asset platform, BONK.fun, and profitable beverage division, Yerbaé. Bonk, Inc. also sees potential for exponential growth due to favorable legislation and a clearer regulatory framework, which could unlock institutional demand and increase transaction velocity in the digital asset sector. These factors, along with the company's planned IPO, make for a bright future for Bonk, Inc.
Silver prices on the MCX have skyrocketed for the third consecutive session, with futures hitting a lifetime high of Rs 1,94,000 per kg. The US Federal Reserve's recent rate cut and strong global cues have contributed to renewed bullishness in the market. In 2025 alone, silver has seen a remarkable increase of 122.07 per cent, indicating a strong rally for the precious metal. As for gold, it has also seen an uptick, rising to Rs 1,30,641 per 10 grams on MCX. Analysts attribute silver's surge to high industrial demand and tightening global supply conditions.