Oil explorers slump on gas pricing worries

Thu Jun 19, 2014 2:06pm IST

A technician opens a pressure gas valve inside the Oil and Natural Gas Corp (ONGC) group gathering station on the outskirts ofAhmedabad March 2, 2012. REUTERS/Amit Dave/Files

A technician opens a pressure gas valve inside the Oil and Natural Gas Corp (ONGC) group gathering station on the outskirts ofAhmedabad March 2, 2012.

Credit: Reuters/Amit Dave/Files

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Reuters Market Eye - Oil explorers slump on worries higher gas pricing might be allowed only for incremental output, which dealers say can limit upside for such companies for at least the next two years.

"The petroleum ministry has proposed that higher gas price as per the Rangarajan formula could be allowed only for incremental production over and above the current levels, as an alternative to applying the formula unconditionally from July 1," a report in Financial Express said on Thursday.

Oil and Natural Gas Corp (ONGC.NS) slumps 6.3 percent while Oil India (OILI.NS) is down 5.2 percent.

Among, private oil and gas producers Reliance Industries (RELI.NS) falls 2.8 percent while Cairn India (CAIL.NS) is down 0.8 percent.

(Reporting by Abhishek Vishnoi)

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Comments (2)
indianmoney wrote:
Gas pricing has been an issue which is affecting both the Government and the refinery Companies.While refineries want a higher price for the gas the Government wants to keep prices as low as possible to avoid an increased price of electricity.With refineries/gas exploration understating production they are at loggerheads with the Government.Increases prices for gas beyond the prescribed limits should be the way out.

Jun 19, 2014 4:56pm IST  --  Report as abuse
indianmoney wrote:
Gas pricing has been an issue which is affecting both the Government and the refinery Companies.While refineries want a higher price for the gas the Government wants to keep prices as low as possible to avoid an increased price of electricity.With refineries/gas exploration understating production they are at loggerheads with the Government.Increases prices for gas beyond the prescribed limits should be the way out.

Jun 19, 2014 4:56pm IST  --  Report as abuse
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