Shares of five gas utility companies rose by 2.82% to 6.22% at 14:47 IST on BSE on speculation that the government will soon hike gas prices.
Gujarat Gas Company (up 6.22%), Gujarat State Petronet (up 6.14%), GAIL (India) (up 4.34%), Petronet LNG (up 3.20%) and Indraprastha Gas (up 2.82%), edged higher.
The S&P BSE Sensex was up 318.90 points, or 1.27% at 25,350.22.
The high level Cabinet meeting on gas prices is reportedly scheduled to be held on Tuesday, 24 June 2014.
According to media reports, the government may allow gas producers to charge a $5.5-6.8 a unit on their existing output. This is lower than the $8.4 per unit price that the previous UPA government had notified based on the Rangarajan panel formula. Currently, gas producers get $4.2 a unit.
However, in a boost to gas producers the new government has proposed that the incremental gas output could be sold at market prices through a tendering system, reports suggested. Currently, imported LNG gas costs nearly $14 per unit.
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