RIL, ONGC shares fall on delay in gas price hike

Shares of oil and gas producers fell in early trading on Tuesday after the the Election Commission asked the government to defer a planned hike in gas prices due to start on 1 April. 

Reliance Industries Ltd was the biggest loser among Sensex stocks, with its shares falling as much as 3%. State-run Oil and Natural Gas Corp. Ltd fell nearly 4% in early trade on Tuesday.

Meanwhile, shares of gas distributor Indraprastha Gas Ltd gained 0.9%, while Gujarat Gas Co. Ltd was up 2.6%.

Other shares of companies dependant on gas also rose. Tata Power Co. Ltd gained 0.7%, while Chambal Fertilisers and Chemicals Ltd was up 2.5%.

 

The Election Commission decision will likely delay by at least a few months the revision of the gas price that attracted controversy when it was announced in June last year.

 

Communist Party of India leader Gurudas Dasgupta and a non-governmental organization have petitioned against the gas-pricing formula approved by a cabinet panel that would have led to a doubling of the gas price from the current $4.2 per million metric British thermal unit (mmBtu) to nearly $8.4/mmBtu with effect from April.

 

The Aam Aadmi Party (AAP) has also sought a deferment of the gas price hike. AAP leader Arvind Kejriwal had in his short-lived stint as Delhi chief minister ordered a first information report (FIR) against oil minister M. Veerappa Moily, Mukesh Ambani and others for allegedly conspiring to double gas prices.

Rahul kumar Gupta,
PGDM,1st Year.
Source:- Mint