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Higher prices of natural gas take the steam out of gas utility stocks

However, despite the likely pressure on volumes and margins, and having cut earnings estimates, most analysts are positive on the natural gas sector

Gas pipeline
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Photo: Bloomberg

Devangshu Datta
A sharp rise in the price of natural gas has impacted the margins of downstream players. The domestic price of natural gas was reset in April to $6.1 per metric million British thermal units (mmBtu), from $2.9 per mmBtu in the earlier six-month period. There is a price ceiling of $9.92 per mmBtu for deepwater and ultra-deepwater gas - a hike from $6.13. The next reset will be in October.

For distributors, this influences margins. It may affect demand. Transporters are likely to continue using gas since the price equation is favourable in comparison to diesel and petrol. That demand will

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First Published: Jun 16 2022 | 1:32 PM IST

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