@sambandham82 @Shaunak_Kiwalkar Thanks for raising valid points.
As I mentioned, these are potential challenges:
- How much does the narrowing of price gap between petrol/diesel and CNG impact IGL’s ability to pass-on price increases? (Key considerations – cost of vehicle, mileage and price differential).
- Any roadblock from government in terms of CGD companies increasing prices?
On the flipside, also worth mentioning:
- Per kilometer running cost is important to the pricing decision and as mentioned in the newsletter: “Even if the gas cost rises by Rs.5 per kg, the cost per kilometre rises to Rs.2.40 per kg (i.e., an increase of fifteen paise per kilometre).”
- Potential benefits from excise duty cut, bringing natural gas under GST – Implications Of Bringing Natural Gas Under The GST Regime
Either way, it’ll be interesting to see how this plays out.
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