New Delhi: All three listed City Gas Distributors (CGD) finished in positive territory on the BSE on Wednesday. Adani Total Gas led the pack with a gain of 2.49 percent. Indraprastha Gas followed at 2.41 percent, while Mahanagar Gas added 1.63 percent. The move came after the government cleared an incentive scheme built around expanding piped natural gas (PNG) networks into fresh territory.
Follow Energy Watch on X
Siddhartha Khemka, Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd, tied the day's move to the policy. "Indraprastha Gas and Mahanagar Gas gained 3-4 percent, following government incentives aimed at boosting domestic piped-gas connections, providing a positive outlook for city gas distributors," Khemka said.
The range cited in that assessment sits above the closing moves recorded on the BSE, where Indraprastha Gas finished 2.41 percent higher and Mahanagar Gas 1.63 percent higher.
The scheme hands city gas distributors an extra 200 standard cubic metres (SCM) of lower-priced domestic natural gas for every new billed household piped-gas connection they add. It is designed to make the switch from LPG cylinders to piped gas in household kitchens move faster.
The allocation does not apply across the board. It covers only incremental domestic PNG connections above a threshold fixed separately for each geographical area. The scheme takes effect from September 1.
An official statement from the oil ministry set out two objectives. The first is converting inactive, unbilled connections into working ones. The second is pushing PNG networks into areas they do not yet reach. India has roughly 1.74 crore domestic PNG connections at present.
The gas on offer is domestically produced and carries administered price mechanism (APM) pricing, which puts it below imported alternatives. Eligible distributors can channel it into displacing part of the costlier LNG they currently buy for their compressed natural gas (CNG) transport business. The swap brings down their overall gas-sourcing bill.
Those savings feed directly into project economics. The government said the payback period on capital spending for domestic PNG connections is expected to compress to roughly three years, against about 10 years currently. On the government's reading, that sharpens the commercial case for distributors to keep adding household connections.
Follow Energy Watch on LinkedIN
The drive to widen piped gas coverage picked up during the West Asia crisis earlier this year. Supply disruptions hit LPG at the time, and the government began looking for routes to cut the country's reliance on cylinders. The commercial segment drew particular attention in that effort.
