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CGD gas distributors see margins aided by a one-time domestic gas scheme
The scheme starts 1 September and includes 200 scm of additional APM gas per new customer, with an estimated annual surplus for major distributors.
City gas distribution companies face scrutiny after a central government policy boost tied to increasing domestic piped natural gas, or D-PNG, consumption. The plan would give CGDs a one-time additional allocation of 200 standard cubic metres of gas through the administered price mechanism for each new customer, above the number added during a base period, according to LiveMint Markets.
The benefit is designed to help CGDs that already source part of their gas requirements at cheaper APM rates, while buying the rest at market prices. With household average consumption below 200 scm, the extra allocation would allow distributors such as Indraprastha Gas (IGL), Mahanagar Gas (MGL), and Gujarat Energy (GEL) to replace some of the more expensive non-APM gas they procure.
LiveMint Markets said Nomura Global Markets Research estimated annual surpluses, based on FY26 consumption, of 92 scm for MGL, 83 scm for IGL, and 69 scm for GEL. Emkay Global Financial Services estimates MGL could save ₹110 crore and IGL ₹20 crore, assuming market gas at $12 per mmbtu and APM gas at $7 per mmbtu, which it said would be about 11% and 1.1% of FY26 pre-tax profits, respectively.
The paper cautioned the savings may narrow if CGDs share incentives with new customers to speed up onboarding, and it noted the scheme lasts six months starting 1 September in two phases based on which customer cohorts become the base for each phase. Because the allocation is one-time, the report said CGDs are likely to prioritize adoption within existing connected areas rather than infrastructure expansion.
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