Shares of oil and gas companies are trading higher by up to 3% in early morning deals on the BSE after the government has officially notified the new gas pricing policy that would be applicable to all the domestically produced gas from April 2014 which will be effective for five years.
Oil and Natural Gas Corporation (ONGC) has rallied 3% to Rs 292, while Reliance Industries (RIL) was up 2.3% at Rs 876 on the BSE. Oil India, IOC, BPCL, Cairn India, Petronet LNG and HPCL are up 1-2%.
As per the new pricing mechanism, the new gas price is likely to be US$8.4/mmbtu for FY2015. Currently, gas prices are in the range of US$4.2-5.7/mmbtu for domestically produced gas.
According to analyst at Angel Broking, RIL and ONGC are likely to be main beneficiaries of higher gas prices. Analyst maintains Accumulate rating on ONGC with a target price of Rs 318 and Buy rating on RIL with a target price of Rs 1,020.
Oil and Natural Gas Corporation (ONGC) has rallied 3% to Rs 292, while Reliance Industries (RIL) was up 2.3% at Rs 876 on the BSE. Oil India, IOC, BPCL, Cairn India, Petronet LNG and HPCL are up 1-2%.
As per the new pricing mechanism, the new gas price is likely to be US$8.4/mmbtu for FY2015. Currently, gas prices are in the range of US$4.2-5.7/mmbtu for domestically produced gas.
According to analyst at Angel Broking, RIL and ONGC are likely to be main beneficiaries of higher gas prices. Analyst maintains Accumulate rating on ONGC with a target price of Rs 318 and Buy rating on RIL with a target price of Rs 1,020.
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