Mahanagar Gas Limited (MGL) shares fell sharply by over 8% today after the company announced a 20% reduction in its allocated Administrative Price Mechanism (APM) natural gas for the CNG (Transport) segment, effective October 16, 2024. This reduction is expected to negatively impact the company’s profitability, as APM gas is a critical resource for fueling its transport services.
In response to the cut, MGL is exploring alternative gas sourcing options to ensure continuous supply and price stability for its customers. These options include domestically produced High Pressure High Temperature (HPHT) gas, New Well/Well Intervention gas from ONGC, and benchmark-linked long-term gas contracts.
This reduction in APM gas allocation is part of a broader policy by the Ministry of Petroleum and Natural Gas, which prioritizes domestic PNG and CNG (Transport) segments based on gas availability.
As of 9:20 am, MGL shares were down 8.22%, trading at ₹1,626.40 on the NSE.
