Mahanagar Gas Limited (MGL) has announced a significant reduction of approximately 20% in its allocated Administrative Price Mechanism (APM) natural gas for the CNG (Transport) segment, effective October 16, 2024. This allocation cut is expected to have a negative impact on the company’s profitability, as APM gas is a key resource for fueling transport services.
In response, MGL is actively exploring alternative gas sourcing options, including domestically produced High Pressure High Temperature (HPHT) gas, New Well/Well Intervention gas (NWG) from ONGC, and benchmark-linked long-term gas contracts. The company aims to ensure continuous supply and maintain price stability for its customers despite the reduced allocation.
This development comes as part of a broader policy by the Ministry of Petroleum and Natural Gas, which mandates that the allocation of domestically produced APM natural gas is based on availability, particularly for priority segments such as Domestic PNG and CNG (Transport).
This reduction marks a challenging phase for MGL, as it navigates through supply constraints while maintaining its operational efficiency and customer commitments.
