ONGC, Oil India worst hit by domestic gas price cuts; GAIL set to gain

Rising share of gas in the volume mix in a falling price scenario is negative for them

The first gas price cuts for domestic gas in over two years may not be good news for upstream companies like ONGC and Oil India Ltd (OIL), but they might turn out to be a cause for cheer for gas utilities. While ONGC and OIL may see a 2.5 per cent and 5 per cent reduction in FY20 and FY21 earnings, respectively, the same may lead to a 1 per cent and 1.5 per cent earnings boost for GAIL, according to analysts at IIFL.

The prices of domestic natural gas, from October 1, 2019 to March 31, 2020, have been fixed