Yesterday, the Govt, in line with the global trend, reduced the price of natural gas.
It slashed price of domestic gas by 26% to $2.39 per MMBTU for the April to September 2020 period v/s $3.23 per MMBTU for Oct to March. This is currently the lowest price since the new domestic natural gas pricing guidelines were issued in 2014.
It lowered the ceiling price for gas produced from deepwater, ultra deep water , high pressure and high-temperature areas by 33.45%. This is now at $5.61 per MMBTU v/s $8.43 per MMBTU QoQ).
ONGC is not too happy with this price revision as its cost of production at $3.59/mmBtu is higher than the selling price.
The gas distributors are also not happy as their prices will also go down in tandem.
ONGC is down almost 4.5% at Rs.65 levels, IGL slipped 3% to Rs.377.35; MGL did not fall much – it went down less than 1% to Rs.811 and is now trading at Rs.818. Gujarat Gas also fell over 3% to Rs.225.50 and is now trading at Rs.227 levels.