ONGC, Oil India Shares Drop After Government Hikes Natural Gas Prices 

03 Oct 2023, 10:43 AM IST

03 Oct 2023, 10:43 AM IST

One of the rigs deployed at ONGC’s Eastern Offshore fields. (Source: ONGC’s Twitter handle)

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Shares of Oil and Natural Gas Corp. and Oil India Ltd. fell on Tuesday after the Ministry of Petroleum and Natural Gas hiked domestic natural gas prices by 7% as of Sept. 30.

This is the third consecutive hike by the ministry. Since the nomination fields of ONGC and Oil India have a ceiling of $6.50/mmBtu, the hike could impact the pricing of transport fuels like CNG and PNG, used by residential consumers.

Government Raises Domestic Natural Gas Price To $9.20/mmBtu For October

Shares of ONGC fell as much as 4.14%, the most in a single day since Sept. 12, before paring loss to trade 3.54% lower at 10:07 a.m. This compares to a 0.79% decline in the NSE Nifty 50.

The stock has risen 26.1% on a year-to-date basis.

Of the 17 analysts tracking the company, 14 maintain a ‘buy’ rating and three suggest a ‘sell’, according to Bloomberg data. The average 12-month consensus price target implies an upside of 6.1%.

Shares of Oil India fell as much as 3.16%, the most since Sept. 12, before paring loss to trade 2.54% lower at 10:08 a.m. This compares to a 0.78% decline in the NSE Nifty 50.

The stock has risen 40% on a year-to-date basis.

Of the 27 analysts tracking the company, 19 maintain a ‘buy’ rating, four recommend a ‘hold,’ and four suggest a ‘sell’, according to Bloomberg data. The average 12-month consensus price target implies an upside of 5.5%.