Nifty99000 100%

Sensex99000 100%

Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
RSS

News

Gas price hike will benefit producers by Rs 1,300 cr: Ind-Ra

Author: IANS/Wednesday, October 4, 2017/Categories: Oil & Gas

Gas price hike will benefit producers by Rs 1,300 cr: Ind-Ra

New Delhi - The increase in natural gas prices from this month would benefit domestic gas producers by around Rs 1,300 crore during the second half of the current fiscal, India Ratings and Research (Ind-Ra) said.

"The recent gas price increase would lead to an increase in revenue for domestic gas producers by around Rs 13 billion during 2HFY18," an Ind-Ra statement here said. 

The government has increased the price payable for domestic natural gas by around 17% to $2.89 per million British thermal unit (mbtu) for the period October 2017 to March 2018. 

"Prior to this, the gas prices have been revised downward by about 50 per cent since the implementation of the gas pricing formula in October 2014," it said. 

This is the first price increase after five consecutive domestic gas price reductions, and has been driven by an increase in the average gas prices prevalent at the reference gas hubs over the period July 2016 to June 2017. 

The price ceiling for gas from difficult deep-sea and high-pressure high-temperature areas/fields has been raised 13% to $6.30 per mbtu.

The gas price for the April-September period was $2.48 per mbtu, and the ceiling for gas from difficult fields was $5.56. 

"State-run explorers Oil India and Oil and Natural Gas Corp, which contribute around 80% to the total domestic production, would be the largest beneficiaries of the price increase," Ind-Ra said. 

"In the mid-stream segment, Gail (India)'s marketing segment could see about Rs 15 billion higher trading revenue from the sale of domestic gases during 2HFY18." 

"However, compressed natural gas (CNG) and piped natural gas (PNG domestic) end-consumers of city gas distribution (CGD) entities could bear the burden of price increase, as it is usually passed on to the customers," it added. 

Prices of domestic natural gas are revised twice a year. Last year, the government allowed pricing freedom to producers of gas from difficult areas, with a ceiling linked to a mix of other fuels such as coal, liquefied natural gas (LNG), naphtha and fuel oil. 

Print Rate this article:
5.0

Number of views (135)/Comments (0)

rajyashree guha

IANS

Other posts by IANS
Contact author

Leave a comment

Name:
Email:
Comment:
Add comment

Name:
Email:
Subject:
Message:
x

Videos

Ask the Finapolis.

I'm not a robot
 
Dharmendra Satpathy
Col. Sanjeev Govila (retd)
Hum Fauji Investments
 
The Finapolis' expert answers your queries on investments, taxation and personal finance. Want advice? Submit your Question above
Want to Invest
 
 

Categories

Disclaimer

The technical studies / analysis discussed here can be at odds with our fundamental views / analysis. The information and views presented in this report are prepared by Karvy Consultants Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Consultants nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies is required to disclose his/her individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Consultants Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives related to such securities.

Subscribe For Free

Get the e-paper free