InvestorQ : Why has GAIL cut supplies to its customers?
Dawn Cherian made post

Why has GAIL cut supplies to its customers?

Mitali Bhutta answered.
1 week ago

The cut in supplies has necessitated after its major LNG supplier, a unit of Gazprom of Russia, has delayed some of its gas supplies. As a result, India’s gas distribution major, GAIL (India), has started cutting supplies of gas to some of its fertilizer and industrial clients. The flow of gas and LNG imports were negatively impacted as Gazprom of Russia could not supply the requisite levels of gas to India under the deal. One major concern is that the lower gas supplies could seriously impact the domestic supply of fertilizers in India.

Gazprom unit could not deliver some LNG cargoes to GAIL and it has indicated that it may not be possible this time around, although no specific reason has been assigned for the same. GAIL India is even operating its petchem complex in Pata in North India at just around 60% capacity to save gas for other clients. GAIL will reduce gas supplies to clients by nearly 6.5 million cubic metres (MCM) per day. One major outcome could be that India may again end up importing recording quantities of fertilizers this year too.