ONGC, Oil India's earnings may suffer after sharp cut in gas prices

City gas distributors, fertiliser and other end users to gain; MGL can see up to 14 per cent earnings upside: Analysts.

A 25 per cent cut in domestic gas prices for the second half (H2FY21) will only add to challenges for producers such as ONGC and Oil India, which have been already hit by weak crude oil prices.

Gas prices were expected to be cut to $1.9 per MMBtu (million British thermal units), considering the fall in global gas prices. However, the same being set at $1.75 for the October 2020-March 2021 period left the Street stumped.

The government reviews and fixes gas prices every six months, based on a formula tied to global benchmarks (in US, Europe, and Japan). The reduction from