Natural gas prices to rise to record levels this weekONGC - 144 Change: 2.85 (2.02 %)
According to Economic Times, the government-dictated price for natural gas produced in the country is to be revised on October 1. After factoring in the spike in energy prices witnessed in recent months, the rate paid for gas produced from old fields such as of ONGC is likely to rise to US$9/mmbtu from current US$6.1/mmbtu. Simultaneously, difficult fields like the ones of RIL, are likely to get around US$12/mmbtu compared to the current rate of US$9.92/mmbtu.
Revision in gas prices is beneficial for upstream companies such as ONGC and Reliance Industries as this would increase their realisation. However, the gas sourcing cost for CGDs such as IGL, MGL and Gujarat Gas will increase, resulting in a decline in margins.