‘Natural gas price hike negative for GAIL, IGL; RIL marginal beneficiary’

The central government’s decision to increase the domestic administered pricing mechanism (APM) gas price will negate the benefit of increased APM gas allocation to compressed natural gas (CNG) players, Jefferies said in a report.

In a report, Jefferies said the CNG players have limited room to increase the prices given worsening economics.

According to the report, GAIL, Indraprastha Gas and Mahanagar Gas are the key losers, Reliance Industries Ltd could be a marginal beneficiary.

The allocation of high pressure and high temperature (HPHT) gas from Reliance Industries’ KG Field by end of 2022 and new pricing formula from a government appointed committee could provide some respite.