Shares of major Indian LNG companies traded lower on Wednesday, March 4, as markets opened. Petronet LNG declined 9.6 percent to ₹279.45, while Mahanagar Gas fell 8.2 percent to ₹1,110.45. Shares of GAIL (India) also registered a decline of about 6 percent, and Indraprastha Gas slipped 5 percent to trade at ₹158.70.
Market participants attributed the decline to supply disruptions in the Middle East and a sharp rise in global LNG prices. Investors increased selling activity amid uncertainty surrounding supply conditions, which added pressure on LNG-linked stocks in the Indian market.
Asian spot LNG prices climbed to around $25.40 per million British thermal units on Wednesday, marking the highest level since 2023. Supply constraints linked to conflict in the Middle East and shipping disruptions in the Strait of Hormuz have contributed to tighter availability.
Qatar shut down major export facilities, increasing pressure in the global LNG market. Disruptions in the Strait of Hormuz also pushed LNG shipping costs higher, with daily freight rates rising by more than 40 percent. These factors heightened investor concern and contributed to the decline in shares of Indian LNG companies.
Petronet LNG recorded the largest decline among the companies, followed by Mahanagar Gas, GAIL and Indraprastha Gas. According to analysts, the companies maintain solid financial strength, but uncertainty in the global supply chain has increased short-term pressure.
Petronet LNG traded at ₹279.45, Mahanagar Gas at ₹1,110.45 and GAIL at approximately ₹155.25. Indraprastha Gas was trading at ₹158.70.
Qatar accounts for roughly 20 percent of global LNG supply, with a significant portion exported to Asian markets including India, China, South Korea and Taiwan. The shutdown of Qatari facilities and disruptions in the Strait of Hormuz have reduced supply availability.
Experts said the impact is expected to be most pronounced for India and China. India may need to explore alternative options to meet its LNG import requirements. Some buyers may opt for coal or other energy sources instead of purchasing higher-priced spot LNG cargoes at a premium.
With supply risks increasing in the global market, Indian LNG companies may need to reassess their portfolio and diversification strategies.
