Mahanagar Gas, Indraprastha Gas Shares Surge on New PNG Incentive
By Business Desk
Mahanagar Gas and Indraprastha Gas shares jumped over 3% following a new government incentive providing additional APM gas for household PNG connections, aiming to cut costs.
Shares of Mahanagar Gas and Indraprastha Gas surged over 3% in early trading on Wednesday. This significant rise follows the government’s approval of a new incentive scheme targeting household Piped Natural Gas (PNG) connections.
Key Market Movements
- Mahanagar Gas shares: Jumped over 3%
- Indraprastha Gas shares: Jumped over 3%
- Additional Gas Allocation: 200 SCM of domestically produced APM gas per incremental connection
The newly approved scheme provides city gas distribution (CGD) entities with an additional 200 SCM of domestically produced, lower-priced APM gas. This allocation is tied to every incremental billed domestic PNG connection exceeding a predefined threshold within their respective geographical areas.
Incentive Scheme Dynamics
- Encourages activation of existing unused PNG connections.
- Expands services into new regions.
- Aims for a significant increase in new connections and better network utilization.
- Replaces more expensive imported LNG, reducing overall gas-sourcing costs.
The incentive program is slated to commence on September 1, 2026. Currently, India records 1.74 crore domestic PNG connections nationwide, a figure the government seeks to substantially grow.
Economic Outlook and Broader Initiatives
- Projected CapEx payback period: Shortened from approximately ten years to about three years.
- Government efforts include: Streamlining regulatory clearances.
- Working to reduce VAT on natural gas to 5%.
- Launching the National PNG Drive 2.0.
- Developing a unified digital portal for new PNG connection registration and tracking.
This comprehensive governmental push underscores a strategic effort to enhance PNG adoption and improve the operational economics for CGD entities, signaling a clear direction for the sector’s growth.