ONGC, OIL to benefit from upward revision in gas prices
Synopsis
The Union government raised the domestic gas price by 40% to $8.6 mmbtu on October 1 from $6.2 earlier. The price is computed based on the weighted average trailing 12-month price with a lag of three months of the gas benchmarks in the US, UK, Russia and Canada.
ET Intelligence group: Upstream oil stocks such as ONGC and Oil India – among the cheapest large caps — may be back on investor radar following a sharp increase in domestic gas prices as a part of the bi-annual price revision. On the other hand, the downstream city gas distributors (CGD) may suffer earnings downgrades given the pressure on their margins in a bid to maintain sales volume. The Union government raised the domestic gas price by 40%
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