Proposed gas price revision to bring short-term relief to CGDs: Analysts

The proposed domestic gas pricing formula by Kirit Parikh panel will likely provide headroom to CGDs to reduce prices and improve margins, but this may hurt producers like ONGC, Oil India, experts say

The proposed revision in the domestic gas pricing formula by the Kirit Parikh committee is likely to benefit city gas distribution companies (CGDs) in the short term, while it may marginally hurt gas producers such as ONGC and Oil India, analysts say.  

The committee on Wednesday recommended a floor and ceiling price of $4 per mmBtu (metric million british thermal unit) and $6.50 per mmBtu, respectively, for gas produced from old or legacy fields of ONGC and Oil India.

This, experts said, is likely to provide headroom to CGDs to reduce prices and mitigate margin pressures to some extent.

“The