Mahanagar Gas won't offer you subsidies in Mumbai anymore
What's the story
Mahanagar Gas Ltd, a leading gas distributor in India, has announced the immediate suspension of all its subsidy programs. The decision comes as the ongoing conflict in West Asia continues to exacerbate the global energy crisis. The company made the announcement on X today. It said that all support schemes and subsidies for customers have been halted with immediate effect.
Impact
Company expresses regret over inconvenience caused to customers
The subsidy withdrawal by Mahanagar Gas Ltd includes the absorption of downstream piping costs and monthly bill subsidies for self-funded installations. The company expressed regret over the inconvenience caused to its customers, as it tightens its financial belt amid rising crude prices. The price hike comes after the US and Israel attacked Iran, resulting in retaliatory strikes across West Asia and the closure of the Strait of Hormuz, a key oil shipping route.
Market response
CNG prices hiked earlier this month
The announcement of subsidy withdrawal comes days after Mahanagar Gas hiked CNG prices by ₹2 per kg across the Mumbai Metropolitan Region. The new rates came into effect from May 14, taking the cost to ₹84 per kg. At that time, the firm had cited higher gas procurement costs, rising crude oil prices, rupee depreciation, and global energy supply disruptions due to West Asia tensions as reasons for the price hike.