ET Online

(This article was originally published on October 20, 2014.)

NEW DELHI: ONGC, HPCL along with other state-run oil companies saw their shares rise by more than 8 percent on Monday after the Modi government hiked gas prices to $5.6 per unit from $4.2. This will significantly increase ONGC revenues and lift restrictions. This is on diesel fuel regulation.

However, private exploration companies like Reliance Industries may be disappointed as the price of new gas will not apply to Reliance Industries’ KG-D6 production as expected as the company is in mediation with the government.

ONGC shares rose 8.7% on the news, while Indian Oil Corp shares rose 5%. State-owned oil exploration companies like BPCL gained 7.2%, HPCL rose 8.7% to touch a 52-week high of Rs 534% and IOC rose 7.9%.

Shares of companies including state-owned oil and gas firm IOC rose 6.1 percent to Rs 388, BPCL gained 6.7 percent to Rs 709.80 and HPCL rose 7.4 percent to Rs 528.

Shares of Reliance Industries (RI) fell 2.7% in 2019. After recovering the lost ground, the shares fell 0.7% to 9,311. Rs. Today’s trading low was 912.755 and high was Rs. 941.80 Rs.

Finance Minister Arun Jaitley said over the weekend that since the age of 11 years Since January 1 From day one, fuel prices will be calculated on the basis of gross calorific value generated (GCV) 5.611 set at $ per million British thermal units.

The new price will be determined on the basis of Gross Calorific Value (GCV) and as per the previous UPA According to Rangarajan, the government is reviewing the quarterly price changes approved by the Commission every six months.

The revised gas prices are applicable to all Natural Gas Exploration and Licensing Policy (NELP) blocks, some pre-NELP blocks, and Coal Bed Methane (CBM) blocks produced from fields offered to ONGC and OIL India, designated fields.

With the government announcing a 46% hike in gas prices, state-owned oil and gas companies are set to earn around Rs 195 billion in additional revenues through the Exploration and Licensing Policy (NELP), reports The Economic Times.

Analysts said the government’s announcement is favorable to Oil & Natural Gas Corporation of India and Indian Oil Corporation, but unfavorable to Reliance Industries Limited (RIL).

Reliance Industries will use transfer pricing unless it can bridge the gas production gap that the oil ministry blames on the company. However, ET reports that Reliance has attributed the decline to geological reasons.

Ongc/Oil is the top pick due to this announcement,” Lyon Securities said in the report. However, the report added that these developments are neutral to the Reliance industry.