CNG Price Debate: Oil Ministry and City Gas Operators Lock Horns

19 Nov 2024 CW Team

A reduction in government-controlled natural gas supply from legacy fields has escalated tensions between the oil ministry and city gas operators, as the latter push to raise compressed natural gas (CNG) prices to offset rising costs of imported fuel.

The government slashed legacy gas allocations to the city gas sector by 21% in October and 20% in November, citing declining production from older fields. This shortfall is forcing companies like Indraprastha Gas Ltd (IGL), Mahanagar Gas Ltd (MGL), and Adani Total Gas to rely on costlier alternatives such as gas from new fields or imported liquefied natural gas (LNG), squeezing their profit margins.

Despite not directly controlling CNG or PNG prices, the Centre faces mounting pressure to prevent a price hike, particularly in politically sensitive regions like Delhi and Maharashtra, ahead of impending elections. However, oil ministry officials have questioned the operators’ claims of financial strain, citing robust profit margins.

In 2023-24, IGL reported a net profit of ?1.748 billion (?1,748 crore) on a revenue of nearly ?160 billion (?16,000 crore), achieving an 11% margin. Similarly, MGL posted a profit of ?130 billion (?1,300 crore) on a revenue of ?70 billion (?7,000 crore), compared to IndianOil Corporation’s 4.5% margin on revenues of ?8.7 trillion (?8.7 lakh crore). Officials argue these figures suggest operators can absorb rising costs without passing them onto consumers.

A senior ministry official challenged operators to disclose cost breakdowns to justify their demands for price hikes, a request the companies reportedly declined. "There cannot be a situation where operators demand low-cost inputs but avoid transparency in pricing," the official remarked.

The standoff highlights the balancing act between economic realities and political sensitivities in India’s energy sector.

Real Estate

13 Oct 2026

Adani begins construction of Dharavi rehabilitation homes

Construction of rehabilitation homes for eligible Dharavi residents has commenced at the 22-acre Matunga railway site, following a Bhoomi Poojan ceremony performed by Pranav Adani, Director, Adani Enterprises (AEL). The project, being implemented by Adani Navbharat Developers (ANDPL), envisages 10 towers comprising 10,432 rehabilitation apartments and 1,379 commercial and industrial units.Under the in-situ rehabilitation scheme, eligible residents will receive homes measuring 350 sq ft. Residents from Sectors 6 and 1 will be accommodated at Matunga first, followed by nearly 4,500 apartments fo..

Adani begins construction of Dharavi rehabilitation homes

Construction of rehabilitation homes for eligible Dharavi residents has commenced at the 22-acre Matunga railway site, following a Bhoomi Poojan ceremony performed by Pranav Adani, Director, Adani Enterprises (AEL). The project, being implemented by Adani Navbharat Developers (ANDPL), envisages 10 towers comprising 10,432 rehabilitation apartments and 1,379 commercial and industrial units.Under the in-situ rehabilitation scheme, eligible residents will receive homes measuring 350 sq ft. Residents from Sectors 6 and 1 will be accommodated at Matunga first, followed by nearly 4,500 apartments fo..

Seven Propel 470 HEV electric tippers go to work on coal haulage in Chhattisgarh

Propel EV, the electric mobility division of Propel Industries and India's No. 1 electric tipper brand, has deployed seven 470 HEV electric trucks with a leading coal-haulage contractor at one of India's largest opencast coal mines in Chhattisgarh. The trucks are in daily operation, moving coal on continuous haul cycles in one of the most demanding applications in Indian mining.Why Electric - and Why CoalCoal haulage runs round the clock: heavy loads, long haul cycles, steep ramps and abrasive dust. It is also where diesel hurts most. Engines run continuously, fuel is the largest single operat..

CNG Price Debate: Oil Ministry and City Gas Operators Lock Horns

Related Stories

Gold Stories

Adani begins construction of Dharavi rehabilitation homes

Adani begins construction of Dharavi rehabilitation homes

Seven Propel 470 HEV electric tippers go to work on coal haulage in Chhattisgarh

Related Articles

Latest Updates

Recommended for you

Advertisement

Subscribe to Our Newsletter

STAY CONNECTED

Advertisement

Modal Heading

First Name *

Last Name *

Industry *

Email Address *

Mobile Number *

Password *

Confirm Password *

Subscribe to our Newsletter

Email Address *

Password *

Please enter the details

Email Address

Modal Heading

First Name *

Last Name *

Industry *

Email Address *

Mobile Number *

Password *

Confirm Password *

Subscribe to our Newsletter

Email Address *

Password *

Please enter the details

Email Address