ONGC eyes Rs 8,800 cr windfall via gas price hike

Energy giant expects gas prices to go up by $4 per BTU

The Oil and Natural Gas Corporation CMD Sudhir Vasudeva today said he is expecting the gas prices to go up by $4 per million BTU in the wake of the Rangarajan Committee’s recommendations which will bring a windfall of Rs 8,800 crore to the oil company.

“We are expecting the gas prices to go up by $4 which will help us in generating an additional income of Rs 8,800 crore,” Vasudeva said at the company’s headquarters here.

Vasudeva said the cabinet committee on economic affairs (CCEA) is expected to take a decision on increasing the gas prices shortly. “We are very positive that gas prices will increase,” said Vasudeva.

Vasudeva also welcomed the recent hike in the prices of diesel and said it has helped the company to increase its market capital substantially. “We are now no 2 company after Reliance in terms of market cap,” said Vasudeva.

He said the centre’s decision to increase the prices of diesel has helped the ONGC to lower its subsidy burden and under-recoveries to a great extent. “Shares of the company have appreciated (in the stock exchange),” he said.

A panel headed by C Rangarajan chairman of the economic advisory council to the Prime Minister has suggested linking local gas prices with liquefied natural gas, US’s Henry Hub, the UK’s national balancing point and Japan Customs cleared prices, Vasudeva said.