Gas distributor Mahanagar Gas Ltd. announced on Monday, May 25 that it is stopping all support schemes and subsidies for customers with immediate effect. According to the company's social media post on X, MGL stated that "due to the ongoing geopolitical situation and its impact, MGL has been constrained to discontinue all support schemes and subsidies with immediate effect." The suspension includes withdrawal of downstream piping cost absorption and monthly bill subsidies for self-funded installations, with the company expressing regret to affected customers.
The company's decision comes as crude prices have been rising over the last couple of months since the US and Israel attacked Iran, triggering a wave of retaliatory attacks in West Asia and closure of the Strait of Hormuz. As reported by CNBC TV18, this has affected nearly one-fifth of global oil shipping that transits through the strait. The wider conflict in West Asia has escalated with retaliatory strikes and the closure of the Strait of Hormuz, which normally handles around one-fifth of worldwide oil shipments. The disruption has fed into crude price rises that are now affecting Indian city gas distributors, including Mahanagar Gas Ltd.
The announcement came days after MGL raised CNG prices by ₹2 per kg across the Mumbai Metropolitan Region, taking rates to ₹84 per kg from May 14. According to CNBC TV18, at that time, the company had cited higher gas procurement costs, rising crude oil prices, rupee depreciation, and global energy supply disruptions linked to tensions in West Asia. The company had also cited the ongoing geopolitical situation as a factor in the recent price increases. In a separate development, MGL announced on Saturday, May 23 that CNG prices in Delhi were increased by Re 1 per kg, marking the third price hike in CNG rates in 10 days. CNG now costs ₹81.09 per kg in the national capital.
Shares of Mahanagar Gas were last seen trading at ₹1,075.60 apiece on NSE, up 1.97% for the day on Monday, May 25. However, as reported by CNBC TV18, the stock is down 5.80% for the past month. The company expressed understanding of customer concerns and sincerely regretted any inconvenience caused by the subsidy suspension. In a separate development, petrol and diesel prices have been increased for the fourth time in less than two weeks, with petrol prices in Delhi crossing the ₹100-mark at ₹102.12 per litre after Monday's hike.
