ONGC jumped 4.35% to Rs 71.90 after the media reported that India is considering a floor price for natural gas produced from local fields.
According to media reports, the petroleum ministry is considering a proposal under which domestic gas will have a floor pricing that would prevent fuel prices from crashing below an identified threshold in the current subdued market conditions and insulate oil and gas explorers like ONGC from a tariff crash.
The reports further added that the proposal being considered by the oil ministry pegs the price to the popular benchmark Japan-Korea Marker that is used for LNG tariff in North Asia with a discount.
Price of compressed natural gas (CNG) and piped natural gas prices could increase this festive season if the government implements a new floor price mechanism for gas produced from domestic fields.
ONGC is India's largest integrated oil and gas company. ONGC is 60.41% owned by the Government of India (as on 30 June 2020).
The company's consolidated net profit slumped 84.7% to Rs 1,090.03 crore on 42.9% drop in net sales to Rs 62,496.06 crore in Q1 June 2020 over Q1 June 2019.
The scrip extended gains for second day in a row. The stock has added 8.5% in two sessions while the benchmark S&P BSE Sensex rose 3.9% during the same period.
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