IGL May Need Further CNG Price Hikes Amid LNG Pressures

Indraprastha Gas (IGL) may need to raise compressed natural gas (CNG) prices again if liquefied natural gas (LNG) prices remain high and domestic gas supplies stay constrained, according to Probal Sen, Oil and Gas Analyst at ICICI Securities.

The latest ₹4-per-kg increase in Delhi-NCR is likely to provide only partial relief to the company’s margins. This price hike could improve margins by around ₹1.2-1.3 per SCM, but this would still leave IGL below its target of ₹7 per SCM in EBITDA.

Sen expects IGL’s EBITDA to be around ₹4.5-5 per SCM in the July-September quarter of 2026 (Q2FY27), based on current LNG prices. However, this is about ₹2 per SCM below the company’s annual target. September LNG prices will therefore be important in determining whether further price increases are needed.

Either that, or gas prices soften, Sen said, pointing to the two possible ways for IGL’s margins to improve. A resolution around the Strait of Hormuz could also help bring down LNG prices, reducing some of the pressure on city gas distributors (CGDs).