In October 2021, the economy witnessed a sharp 62 per cent hike in domestic gas prices. City gas distribution companies Indraprastha Gas Limited (IGL) and Mahanagar Gas Limited (MGL) are dependent on domestic gas supplies to meet their requirements and recently experienced a margin squeeze due to lower availability of domestic gas for their compressed natural gas and domestic piped natural gas businesses. In addition to this, third quarter (Q3) margins came under pressure even as improvement in gas sales volume and price hikes managed to offset the pain of higher gas cost to an extent. The impact of higher gas prices was also visible in Q3 earnings of IGL and MGL for the financial year 2021-22. A price spike in financial year 2022-23 may act as an overhang in near future as city gas continues to creak under costly purchases.