Why Adani Total Gas has lowered prices for industrial users
What's the story
Adani Total Gas Limited (ATGL), a joint venture between the Adani Group and France's Total Energies, has announced a reduction in the price of excess natural gas for select industrial customers. The new rate is ₹82.95 per standard cubic meter (SCM), down from the previous ₹119.90 per SCM. The change will come into effect from 6:00am on March 16, as upstream gas prices have softened amid ongoing supply disruptions.
Price revision
Price revision to pass on benefit of reduced upstream prices
The price revision by ATGL is aimed at passing on the benefit of reduced upstream prices to customers. The company also wants to maintain system integrity and ensure equitable distribution of gas during the ongoing supply disruption. Earlier this month, ATGL had not increased prices for CNG and piped cooking gas supplied to households, despite imposing supply curbs on some large industrial consumers amid the West Asia crisis affecting gas supplies.
Gas sourcing
ATGL sources about 70% of its gas volumes domestically
ATGL sources about 70% of its gas volumes domestically for CNG users and piped natural gas (PNG)-domestic customers. The prices for these segments remain unchanged. The remaining 30% of gas volumes are sourced through imported LNG, which is supplied to the commercial and industrial users. As the West Asia crisis disrupted India's gas supplies, the Indian government prioritized allotment to CNG and piped cooking gas needs, while pooling the price of imported LNG for users.