New pricing formula to help city gas distributors expand margins
Business

New pricing formula to help city gas distributors expand margins

By Dan Neff

Synopsis

The Union government has provisionally kept the domestic gas prices unchanged at $8.58 per million British thermal units (mmBtu) while it is considering a potential change in the pricing formula. The current formula is based on the trailing 12-month average prices of the global gas benchmarks of the US, Russia, Europe and Canada. Based on this, the domestic gas price could be closer to $11 per mmBtu.

ET Intelligence Group: The stocks of city gas distribution (CGD) companies such as Indraprastha Gas (IGL) and Mahanagar Gas (MGL) fell by 4-5% in the morning session on Monday after the government postponed the customary bi-annual price reset slated for April.Since the deferment is of a technical nature, investors may find the current stock prices of CGD companies attractive given the expectations of margin-led growth prospects in the coming

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4 mins read, Last Updated:

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Dan Neff