As per the new pricing norms, the price for domestically produced gas is fixed and revised every six months. And after the earlier hike, as per the leading industry experts and analyst estimates, the hike for the October-March will be the third consecutive hike that shall see prices boom to the highest price in 3 years time. As per the data compiled by Bloomberg Quint, the raise is expected to be to $3.39 per million British thermal units for the October-March 2019 period. This means a good round of earnings for domestic oil exploration companies including ONGC, OIL etc.
This shall be propelled by a huge surge in the fuel's price as now oil PSUs might e get a trigger to boost investments and thereby enhance production and thus lessen the dependence on more of imports.
Further as per the Bloomberg Qunit report, though the prices will be raised for the third time in a row, the prices are substantially lower than the average production cost for ONGC which the oil-marketer is unable to recover at the current price level. In accordance with the company's annual report, it impacts company's plans per se future endeavors as well as capital expenditure.
The gas price hike will undoubtedly make CNG and PNG dearer and also cast an impact over other industries wherein natural gas is being used as a feedstock namely urea manufacturing, iron sponge, power sector, petrochemicals among others.