Shares of city gas distribution (CGD) companies such as Indraprastha Gas Ltd, Mahanagar Gas, Gujarat Gas, Gujarat State Petronet rallied over 9-18 percent to hit their fresh 52-week highs on Thursday (February 18).

The rally in share prices came after Prime Minister Narendra Modi said that natural gas will soon come under the purview of the Goods & Service Tax (GST) regime. He also announced massive spending on the country’s oil and gas infrastructure.

“We are committed to bringing natural gas under the GST regime. I want to tell the world to come and invest in India,” PM Modi said while launching key oil and gas projects in Tamil Nadu on Wednesday (February 17).

Speaking in an interview with CNBC-TV18, AK Jana, managing director (MD) of Indraprastha Gas (IGL) said that we will see a sharp increase in gas volumes due to GST.

“Every year IGL target increases to 1 million gas and to do so we need the conversion of vehicles and industries to piped natural gas (PNG). On the domestic front, we do not get much volume on that but still we are targeting to achieve maximum domestic conversion.”

However, Jana said, if GST is at 12 percent then there will be a reduction in gas prices, but GST at 28 percent would not largely benefit anyone in the gas segment.

“If it is 12-18 percent, it will be tax neutral,” he said.

On the commission front, he said, “We are in discussion with oil marketing companies (OMCs) regarding their request to increase commission.”

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(Edited by : Anshul Majumdar)