A fire incident at Oil and Natural Gas Corporation's (ONGC) Uran gas processing plant has led to significant disruptions in gas supply to Mumbai, affecting Mahanagar Gas Limited's (MGL) operations and potentially impacting CNG availability across the city.

Fire Incident and Immediate Response

The fire broke out at ONGC's Uran plant at approximately 3:00 PM and was successfully extinguished after a two-hour battle. Fortunately, no injuries were reported during the incident. However, the event has had cascading effects on the gas supply chain in Mumbai.

Impact on Mahanagar Gas Limited

The fire incident has directly impacted Mahanagar Gas Limited's gas supply to its city gate station at Wadala. In response to the supply disruption, MGL has implemented the following measures:

1. Prioritizing PNG Supply: MGL is focusing on maintaining uninterrupted supply to domestic PNG (Piped Natural Gas) consumers, ensuring that households continue to receive gas for cooking and other essential needs.

2. CNG Availability Warning: The company has cautioned that CNG (Compressed Natural Gas) availability may be affected across Mumbai due to low pipeline pressure resulting from the supply disruption.

3. Advisory to Industrial and Commercial Customers: MGL has urged its industrial and commercial customers to switch to alternative fuels temporarily to manage the gas shortage.

Expected Resolution

MGL has stated that full restoration of gas supplies is anticipated once ONGC resumes normal operations at its Uran plant. However, no specific timeline for the resumption of full services has been provided.

The incident highlights the vulnerability of urban gas supply chains to disruptions at key processing facilities. It also underscores the importance of prioritizing essential services, such as domestic PNG supply, during such emergencies.

Consumers in Mumbai, particularly CNG users and industrial customers, are advised to stay updated on further announcements from MGL regarding the restoration of normal gas supply and any potential adjustments they may need to make in the interim.

Mahanagar Gas Limited (MGL), a prominent player in the natural gas distribution sector, has received a significant setback in its ongoing GST dispute. The company recently disclosed that it has been served with a GST appeal order confirming a liability of Rs. 54.33 crore, along with applicable interest and a 100% penalty for the period from July 2017 to March 2022.

Details of the GST Liability

The GST liability stems from a demand order received from the joint commissioner of CGST and Central Excise Mumbai East Commissionerate. The order confirms a GST liability amounting to Rs. 54,32,95,413 plus applicable interest and a 100% penalty for an equivalent amount. This liability falls under section 74(1) of the Central Goods and Services Tax (CGST) Act, 2017, read with corresponding provisions of the Maharashtra Goods and Services Tax (MGST) Act, 2017, and section 20 of the Integrated Goods and Services Tax (IGST) Act, 2017.

Appeal Process and Company's Stance

MGL had previously filed an appeal against the initial demand order with the Commissioner, CGST and Central Excise Appeals-II, Mumbai. However, on August 7, 2025, the Commissioner disposed of the appeal and confirmed the earlier GST liability along with applicable interest and penalty.

In response to this setback, MGL has announced its intention to file an appeal against the order with the GST Appellate Tribunal. The company received the order on August 25, 2025, and is taking swift action to challenge the decision.

Financial Implications and Company's Assessment

Despite the substantial amount involved, MGL remains optimistic about its position. Based on the company's assessment and legal opinion obtained, MGL believes it has a strong case and does not expect any outflow of economic resources as a result of this matter.

Nature of the Dispute

The GST liability pertains to non-payment of GST under Reverse Charge Mechanism (RCM) on the reinstatement/restoration charges paid to the Municipal Corporation of Greater Mumbai and other local bodies under MMRDA. These charges were for digging roads to lay underground pipelines for the transportation of CNG/PNG during the period from July 2017 to March 2022.

Market Impact

While the GST liability represents a significant amount, MGL's confident stance and immediate action to appeal may help mitigate investor concerns. The company's assertion that it does not expect any economic outflow suggests that MGL is well-prepared to handle the legal challenges ahead.

As this situation continues to unfold, stakeholders will be closely watching the proceedings at the GST Appellate Tribunal and any potential impact on MGL's financial position and operations in the coming months.