Mahanagar Gas Limited (MGL) has announced a price hike of ₹2 per kilogram for CNG. The new rates, effective from November 22, have raised the price of CNG to ₹77 per kilogram in Mumbai and surrounding areas. As a result of this increase, the operating costs for vehicles running on CNG have gone up.
This announcement has had a direct impact on the shares of Mahanagar Gas Limited (MGL). The company’s shares saw an increase of nearly 3%, trading at around ₹1,160. This rise follows the recent government decision to reduce domestic gas allocation, prompting the company to raise CNG prices.
Prices Increased After Government Decision
The government has reduced the Administrative Price Mechanism (APM) gas allocation for City Gas Distribution companies by 20%. This cut has been implemented for the second consecutive month. Experts believe that this move will impact the profits of companies like MGL and IGL.
Prices May Rise Further in the Future
Currently, the ₹2 hike in CNG prices represents an increase of approximately 2.6%. According to experts, to offset the reduction in APM gas allocation, CNG prices could rise by 8-10%. It is also likely that Indraprastha Gas Limited (IGL) may increase prices soon.
Increased Burden on Customers
This price hike directly affects the pockets of CNG vehicle drivers. Due to higher operational costs, auto-rickshaw and taxi drivers may raise their fares. This increase presents another challenge for common consumers and businesses, who are already dealing with rising inflation.