 "Gas plan caught in regulatory minefield, New Delhi's ambitious targets to clean its air by decarbonising energy sector will be underpinned by its success in building nascent natural gas segment")
During Q3FY25, the administered price mechanism (APM) gas allocation for the CNG segment was reduced twice, impacting the gas sourcing strategy.
The second cut was rolled back but analysts expect another cut in allocation in early FY26.
Moderation in crude prices (to which gas prices are linked) provides some relief for city gas distribution (CGD) players who were hit hard by allocation cuts. CGD players are expected to focus on volumes, which implies that margins will be compressed.
The first APM reduction was on October 16 last year, with allocation reduced from 63 per cent to 51 per cent.
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