Unchanged natural gas prices could keep ONGC, OIL earnings in check
Domestic gas prices have been kept unchanged at $1.79 per metric million British thermal units (mmBtu). This is not an encouraging news for upstream oil and gas producers such as Oil and Natural Gas Corp. Ltd and Oil India Ltd.
There were some expectations building on upward revision in gas prices with rising spot gas prices. But note that gas prices in Europe, Canada, the US and Japan have not risen significantly yet.
Since domestic gas pricing decisions take into consideration the average of international gas prices, it isn’t entirely surprising that prices have been kept unchanged. Nevertheless, since gas price increase in international markets comes with a lag of a quarter or so to spot gas prices, the Street will be watchful on gas price review in October, say analysts.
