City gas distribution stocks are feeling the heat this week. Shares of Indraprastha Gas Ltd (IGL), Mahanagar Gas Ltd (MGL) and Gujarat Gas Ltd have declined in the range of 6-8% since Friday. Concerns over competition and the resultant adverse impact on profitability have weighed on investor sentiment.
In a conference call with investors and analysts on Monday, the Petroleum and Natural Gas Regulatory Board (PNGRB) explained more about the need to introduce common carrier (competition) in the CGD sector. Last year, PNGRB had released a draft regulation on open access in CGD, which facilitates the entry of third party marketing entities in areas operated by other CGD companies. The move is expected to protect consumer interest and boost gas penetration in the country.
