City gas distribution (CGD) sales volume is surging 18-20 per cent this fiscal compared with a slattosh run last fiscal, said a CRISIL report. This is driven by demand pull from improving price competitiveness of domestic gas compared with substitute fuels because of falling gas prices and supply-side impetus from continued growth in distribution infrastructure. Operating margin, it added, will improve too riding on reduced procurement cost and better absorption of fixed cost due to higher volume, which will support the credit quality of distributors.
