Indraprastha Gas (IGL) will not decrease the price of compressed natural gas (CNG) hereon. In a conversation with CNBC-TV18, board member, Pawan Kumar said so and shed light on the increase in domestic gas allocation and a surge in gas prices.

In a positive move for city gas distribution companies, the government recently increased domestic gas allocation for the second quarter of this fiscal to 94 percent of the full requirement from 85 percent in Q1. This increased allocation reduces input costs since the companies now need to pay less to import higher-priced gas.

However, the company, will not be reducing prices. “We have a long-term view. So that we do not lose customers, we didn't increase the prices and we are not going to reduce,” said Kumar.

Also Read: Mahanagar Gas cuts PNG and CNG prices on higher supply from govt

“ When the prices were increased, IGL took a conscious decision that we will not increase the prices. So we didn't increase any price after May. And we absorbed the entire hike ourselves and we reduce the costs and maintained our profitability,” he explained.

The allocation for gas has decreased for the company. “In the case of IGL, the allocation has come down, but we have long-term contracts at a reasonable price. So we are not using any spot LNG nowadays,” Kumar said.

The company gets about 6 mmscmd of gas from the domestic allocation. He said, “We are currently getting around 6 mmscmd per day and the allocation has in fact decreased for IGL. Earlier we were getting around 6.5 million per day, but now it is around 6.06.”

For the entire interview, watch the accompanying video

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(Edited by : Abhishek Jha)