Adani Total Gas Ltd witnessed a lower allocation of gas sold at the Administrative Price Mechanism (APM) price and it expects gas prices to remain high in the “near future” due to the global supply shortage, the company said in a statement.
The company said that there has been a significant increase in Administrative Price Mechanism (APM) prices and regasified liquefied natural gas (R-LNG) prices. There was also a lower allocation of APM gas during the quarter which has impacted the gas cost as well as the gross margins.
“It has been a challenging scenario for the CGD (city gas distribution) industry with significantly high input gas prices mainly due to geopolitical factors as well as supply shortages across the globe, which are likely to continue in the near future. ATGL has calibrated the increase in its sales price balancing the interest of its consumers with the sudden spurt in gas prices,” said Suresh P Manglani, chief executive officer.
CGD companies had sought help from the Ministry of Petroleum and Natural Gas (MoPNG) as they faced supply constraints even as they were expanding their network. Responding to this, the government has revised the guidelines for domestic APM gas allocation and price. In May, the government said that CGDs will be provided gas allocation up to 102.5% on the basis of the previous quarter's average consumption instead of the earlier six-month average. APM gas will be available at a unified base price which will be notified on the first of every month.
On August 4, the company reported a net profit of Rs 138 crore for the first quarter of 2022-23, flat from a year ago. Its revenue from operations soared to Rs 1,110 crore in the June quarter from Rs 522 crore, driven primarily by the substantial rise in the cost of natural gas which is passed on to customers.
Adani Total Gas is in the business of CGD and Piped Natural Gas to industrial, commercial, and residential, and sells Compressed Natural Gas (CNG) to the transport sector. It operates in 52 geographical areas (GAs), of which 33 are owned by the company and the balance 19 GAs are owned by Indian Oil-Adani Gas Private Limited (IOAGPL) – a 50:50 joint venture between Adani Total Gas Limited and Indian Oil Corporation Limited."ATGL has been focussing on creating the infrastructure so that it can be future ready to serve its large consumer base and contribute towards the nation’s journey to a gas-based economy,” Manglani said.