Reliance Industries share price gains on new gas pricing

Business

oi-Sunil

By Sunil Fernandes

Updated: Friday, December 20, 2013, 10:34 [IST]

Shares in Reliance Industries rallied in trade after the government approved a new gas pricing subject to bank guarantees. The stock was last trading higher by 1.5 per cent at Rs 867 on the National Stock Exchange.

The Union Cabinet has permitted, India's largest private sector company Reliance Industries to charge the new gas price for all its fields against a bank guarantee to be encashed if the company is found guilty of hoarding gas.

The bone of contention between Reliance and the government has been the hoarding of gas, which the company has been time and again accused of.

The bank guarantee to be given by the company will essentially cover the difference between the current gas price of $ 4.2/per million British thermal units (mmBtu) and the new formula rate, which will be encashed in case it is proved later that the company was hoarding gas.

Investors say that there was no large scale rally in the share price of Reliance Industries as the hike in gas was already factored in by the markets.

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