Cut in gas prices to help GAIL, end users; ONGC & Oil India may take a hit though

The cut in prices of domestically produced gas augurs well for companies such as GAIL as well as natural gas end-users including power, fertilisers and sponge iron companies, as it decreases the cost of manufacturing of urea, petrochemicals and power, which use natural gas as a feedstock, said analysts.

However, they said, the impact on city gas distributing (CGD) companies is neutral since they will lower prices 3-4 per cent to pass on the benefit to consumers and negative for companies such as ONGC and Oil India.

The government has reduced the domestic natural gas price, APM and high pressure, 12.5 per cent and 9.5 per cent, respectively, applicable for the October 2019-March 2020 period.