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Gujarat will be the largest beneficiary of the reduction in the basic custom duty on the LNG, which has been reduced from 5 per cent to 2.5 per cent.
The state currently has 27.5 million tonnes of installed LNG capacity at two ports - largest in the country, while three more ports are in the pipeline to come up with combined capacity of 15 million tonnes per annum.
The state has the largest gas grid in the country with maximum number of PNG connections through two of the leading city gas distribution (CGD) players, Adani Gas and Gujarat Gas - an arm of GSPC Group.
The decision is likely to benefit the LNG-based industries such as power, fertilizers and chemicals besides the CGD sector in the state.
Industry sources revealed that with reduction in the customs duty, not only the profitability of the CGD players will improve, but also the benefits will be passed on to the gas consumers in the form of cut in the gas prices. "How much will be the reduction that only time will tell. The companies will have their economics on how much to pass on to the consumers. But the gas prices have to be reduced," said a source.
Gujarat Gas shares ended positive with gains of over 3 per cent on the NSE at Rs 589 on Wednesday.
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