MGL, IGL Shares Jump Up To 6%, New PNG Policy And Supply Fears Boost City Gas Stocks

Mumbai: Shares of city gas distribution companies saw a sharp rise on Wednesday. Stocks of Mahanagar Gas Ltd. (MGL) and Indraprastha Gas Ltd. (IGL) surged up to 6 percent during the session.

The rally came as investors reacted to new government policies and concerns over gas supply disruptions due to the ongoing West Asia conflict.

Supply concerns drive sentiment

The conflict in West Asia is expected to affect LPG and LNG supplies for a longer period. There are fears of damage to energy facilities in the Gulf and possible disruption in the Strait of Hormuz.

These risks have increased interest in domestic gas solutions like piped natural gas (PNG), which is seen as more stable and reliable.

New PNG policy supports growth

The government has introduced a new “switch to PNG” framework. This policy creates clear and uniform rules for city gas companies to expand their pipeline networks.

It aims to make the process easier by solving issues such as land access delays, approvals and high charges for laying pipelines.

LPG to be stopped if PNG is available

As part of the policy, LPG supply may be stopped after three months if consumers do not switch to PNG where connections are available.

Oil companies will notify households before discontinuing supply, giving them time to shift to piped gas.

Faster rollout and strict timelines

The government has set strict timelines to speed up PNG connections. Land access approvals must be given within three working days.

Once approved, domestic PNG connections should be provided within two days. This will help gas companies expand quickly.

Big opportunity for expansion

Officials said around 60 lakh households can be connected to PNG immediately where pipelines already exist.

City gas companies have also been directed to provide connections to institutions like schools, hostels and community kitchens within five days.

Outlook for city gas companies

The new policy is seen as a positive for companies like MGL and IGL. Faster approvals and higher demand could boost their growth.

At the same time, supply risks from global markets are likely to support long-term demand for PNG in India.

Disclaimer: This article is based on market reports and official updates. Stock movements may change. It is not investment advice. Investors should consult financial experts before making any investment decisions.