Indraprastha Gas To Make Its Own Meters To Cut Reliance On Imports
Indraprastha Gas Ltd. signage is displayed at a gas station in New Delhi, India. Photographer: Prashanth Vishwanathan/Bloomberg

Indraprastha Gas To Make Its Own Meters To Cut Reliance On Imports


As city gas distribution network in India expands rapidly, Indraprastha Gas Ltd. plans to set up a factory to manufacture gas meters used to bill households and industries for the consumption of the environment-friendly fuel, as it looks to cut reliance on imports from China for the same.

IGL will invest about Rs 100 crore for setting up a unit in the national capital region to manufacture 1 million meters annually, its Managing Director ES Ranganathan said.

The plan is part of the Modi government's push towards raising the share of environment-friendly fuel in India's energy basket to 15 percent by 2030 from the current 6.2 percent.

Also read: BQ Edge | Why IGL’s Stock Has More Steam Left And Can The HEG Buyback Benefit You?

As part of this, the City Gas Distribution network for retailing Compressed Natural Gas to automobiles and Piped Natural Gas for household kitchens and industries is targeted to expand to more than 400 districts spread over 27 states and Union Territories covering approximately 70 percent of India's population and 53 percent of its geographical area.

"Currently, gas meters are mostly imported from China and we felt there is a need for a domestic manufacturing unit to cut reliance on imports and boost 'Make in India'," Ranganathan said.

IGL, which retails CNG and PNG in the national capital region, is in talks to finalise a partner for the metering unit. "We are in the advanced stage of talks," he said without elaborating.

Also read: Should I Invest In IGL, PC Jeweller Or Vedanta? #AskBQ

The company will invest Rs 50 crore in plant and machinery and the remaining in land and building.

Currently, CGD network spans close to 100 cities and districts covering about 90 lakh households and industries and about 35 lakh CNG vehicles. The network is targeted to be expanded to over 400 districts, covering 2 crore households with PNG connections.

As the CGD network expands, the demand for meters will also rise.

Ranganathan said city gas demand is likely to grow 10 percent in the near future and IGL is planning an investment of Rs 1,100 crore next fiscal, mostly in setting up of CNG dispensing stations and laying piped gas lines to households and industries.

Also read: U.S. Gas Developer Rattled as Indian Buyer Seeks Competing Deal

The company will have 559 CNG stations by the end of the month and it plans to add another 60 in the next fiscal (April to March), he said adding IGL gave 2.8-3 lakh PNG connections in the current financial year and the same pace will be maintained in the next.

Natural gas in the form of CNG is 60 percent cheaper as compared to petrol and 45 percent cheaper as compared to diesel. Also, PNG is 40 percent cheaper as compared to the market priced LPG and the price of PNG almost matches that of subsidised LPG based on prices in Delhi.

Also read: GAIL To Invest Rs 1.05 Lakh Crore To Create Infra For Gas-Based Economy

Natural gas is the cleanest and most efficient of fossil fuels and has the potential to play an important role in the world's transition to a more affordable and secure cleaner energy future.

Because of its high energy content, it provides substantial environmental benefits, such as improved air quality and reduced carbon emissions.

IGL supplies CNG to over 11 lakh vehicles in the national capital region through a network of CNG stations. It also sells PNG to over 12 lakh household kitchens in the national capital and adjoining towns.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.