Apr 08: As per our estimates, a 9.8% increase in natural gas prices can potentially lead to a 4.7% increase in cost of production of urea, thus increasing the working capital intensity of the fertilizer manufacturers and also adding pressure on the fiscal spending of the government while disbursing the urea subsidy.
8Natural gas accounts for only 3%-4% of the total power generated thus the impact on the rise in price of natural gas will not be very significant.
8But the full impact of the price hike will be passed on to consumers by CGD companies. Even so, CNG usage is unlikely to see a downward movement given its high price differential in relation to completing liquid fuels.
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