FE
City gas distribution (CGD) sales volume is surging 18-20 per cent this fiscal compared with a slattosh run last fiscal, said a CRISIL report. This is driven by demand pull from improving price competitiveness of domestic gas compared with substitute fuels because of falling gas prices and supply-side impetus from continued growth in distribution infrastructure. Operating margin, it added, will improve too riding on reduced procurement cost and better absorption of fixed cost due to higher volume, which will support the credit quality of distributors.
CRISIL Ratings assessed nine distributors with ~90 per cent market share for fiscal 2023 to reach the conclusions. It said that the movement in gas prices is a crucial operational parameter for distributors as it impacts their competitiveness compared with alternate fuels. This, in turn, impacts their volume growth.
