The government has increased the allocation of subsidised domestic gas to city gas distributor Indraprastha Gas (IGL) by 31 per cent, a move expected to enhance the company’s profitability, as stated in its regulatory filing.

In a media release received from GAIL (India), the nodal agency for domestic gas allocation, IGL was informed of the revised allocation, effective from 16 January 2025. “The domestic gas allocations to IGL have been revised upwards by 31 per cent, increasing the share of domestic gas in the compressed natural gas (CNG) segment from 37 per cent to 51 per cent,” the company said.

Additionally, IGL has secured about 1 million metric standard cubic metres per day (MMSCMD) of regasified liquefied natural gas (RLNG) at competitive prices, further stabilising its input costs and boosting its supply capacity.

In recent months, the government had reduced the allocation of cheaper domestic gas to city gas companies, leading to higher input costs and temporary supply disruptions for CNG retailers. The reduced allocations also weighed on the stock prices of companies in the sector.

IGL noted that the increased allocation and the additional RLNG volumes would positively impact its profitability.

Following the announcement, shares of IGL, valued at approximately Rs 29,300 crore, closed 2.7 per cent higher on Thursday, outperforming the benchmark Sensex, which ended 0.7 per cent lower. Despite the gain, IGL shares have declined nearly 25 per cent over the past three months.

https://www.businessworld.in/article/govt-hikes-igls-domestic-gas-allocation-by-31-544494