Oil India hits 31-month high; ONGC at 52-week high on gas price hike

Shares of oil exploration & production (E&P) companies continued their north-bound journey, gaining by up to 3 per cent on the BSE in Friday’s intra-day trade in an otherwise weak market on the back of 62 per cent hike in domestic natural gas prices.

The price of domestic-produced natural gas has been hiked to $2.9 per million British thermal units (mBtu) for the October 2021-March 2022 period on Thursday. The ceiling price of natural gas produced from deepwater, ultra-deepwater, and high pressure-high temperature (collectively called difficult) discoveries has also been hiked to $6.13 per mBtu. The hikes follow a firming up of gas prices on global benchmarks that dictate domestic rates, the Business Standard reported. CLICK HERE FOR FULL REPORT

A further hike in domestic gas prices is expected in the next revision in April, 2022. The beneficiaries of the gas price hike include upstream companies like Oil and Natural Gas Corporation (ONGC), Oil India, and to a much lesser extent Reliance Industries.

The stock of hit a 31-month high at Rs 267.70, up 3 per cent on the BSE in intra-day trade on Friday. The stock now trades at its highest level since March 2018. hit a 52-week high of Rs 149.60, and was also up 3 per cent on the BSE. It surpassed its previous high of Rs 149 touched on September 29, 2021. In comparison, the S&P BSE Sensex was down 0.64 per cent at 58,745 points at 09:36 am.

The sharp rise in gas prices (on a lower base) is as per expectations. While upstream companies will benefit from the price hike, City Gas Distribution (CGD) companies have hiked prices in Q2FY22. On the margin front, potential hike in prices coupled with global liquefied natural gas (LNG) price trend will be the key monitorable, ICICI Securities said in a note.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Leave a Reply

Your email address will not be published. Required fields are marked *

WP Twitter Auto Publish Powered By : XYZScripts.com