Adani Total Gas Limited (ATGL) has not increased the prices of CNG and piped cooking gas (PNG) for homes. However, the company has reduced the quantity of gas supplied to some big industries due to the gas supply being affected due to increasing tensions in West Asia. ATGL is a joint venture between Adani Group and Total Energies of France.
According to the company, about 70% of the gas received by ATGL is produced in India only. This gas is supplied to vehicles using CNG and piped gas (PNG) used in home kitchens. There has been no change in the prices for these two. The remaining approximately 30% of the company’s gas comes from imported LNG (Liquefied Natural Gas), which is supplied to commercial and industrial customers.
Supply affected by Strait of Hormuz
Due to increasing war in West Asia, the movement of ships through the Strait of Hormuz has stopped. This is the sea route through which India gets large quantities of crude oil and LNG. Due to this, the supply of imported gas has been affected. For this reason, commercial and industrial customers have been asked to use only 40% of their scheduled gas consumption. Customers will have to pay the same old price for using up to 40% gas. This fixed price for commercial and industrial customers is approximately Rs 40 per standard cubic meter.
What will be the impact on industries?
If a customer uses more than 40% gas, the spot market price will be applicable on that additional gas. The spot price is high because the company has to buy expensive gas from other sources to meet the shortage of imported LNG. Currently the spot price is $ 24-25 per mmBtu, whereas earlier it was around $ 10 per mmBtu (million metric British thermal units). Because of this, industries that use more than 40% gas will have to pay approximately Rs 119 per standard cubic meter for additional gas. The company said that it is making every necessary effort to maintain continuous supply of gas and protect the interests of customers, even if there are challenges in supply.
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