Gujarat Gas Limited, a major gas distribution company in India, has announced an increase in the prices of industrial gas. The prices will rise from ₹38.43 per standard cubic meter (scm) to ₹40.83 per scm, with the new rates taking effect from August 21.
This increase follows a series of five consecutive price cuts that the company implemented earlier in the year. At the beginning of 2023, the industrial gas prices stood at ₹47.93 per scm, but Gujarat Gas implemented price cuts which brought the price down to ₹38.43 per scm.
The decision to raise prices is believed to be a response to the recent hike in spot liquefied natural gas (LNG) prices. As LNG is an important component of the industrial gas supply chain, fluctuations in its price can have a significant impact on the overall cost of industrial gas.
In addition to this price adjustment, Gujarat Gas recently acquired shares worth ₹100 crore in the Gujarat State Petroleum Corporation LNG Limited. This acquisition was made to enhance synergy and integration in the gas value chain. Following the investment, Gujarat Gas now holds a total of 7.87% stake in Gujarat State Petroleum Corporation LNG Limited.
Gujarat Gas highlighted that the acquisition will support its toll model operation, providing regasification services and loading services for LNG tanker trucks. This will particularly benefit customers who are not connected to pipeline networks. The company also mentioned the potential for future development in LNG storage and reloading as an alternate line of business.
In the April-June quarter, Gujarat Gas reported a decline of 43% in net profits, which dropped to ₹215 crore from ₹381 crore in the corresponding quarter of the previous fiscal year. However, the company experienced an increase in sales of industrial gas during this period.
Overall, the price increase by Gujarat Gas reflects the impact of LNG price fluctuations on the industrial gas market. As the company strives to maintain profitability and improve operational efficiency, it is actively exploring avenues for growth and integration in the gas value chain.