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ONGC, RIL shares spurt on gas price hike approval

ONGC, RIL shares spurt on gas price hike approval

Oil and gas companies rose as much as 10 per cent on the bourses, after the government approved near doubling of natural gas prices, a move seen positive for upstream companies.

Oil and gas companies on Friday rose as much as 10 per cent on the bourses, after the government approved near doubling of natural gas prices, a move seen positive for upstream companies.

The government gave its approval on Thursday to the near doubling of natural gas prices to $8.4 from April 1, 2014, a move which will result in rise in power tariff, urea cost and CNG prices.

The new price will apply uniformly to all producers, be it state-owned firms like Oil and Natural Gas Corp (ONGC) or private sector Reliance Industries (RIL).

Cheering the move, ONGC climbed 10 per cent to Rs 353, while RIL's scrip jumped 5.12 per cent to Rs 873 on the Bombay Stock Exchange. Among others, Oil India rallied 9 per cent, while Gail India was trading 1.96 per cent higher.

"The hike is positive for upstream companies such as ONGC and Reliance Industries," Angel Broking said in a report.

The BSE Sensex, meanwhile, was trading at 19,301.42 in afternoon trade - a jump of 425.47 points or 2.25 per cent from its previous close.

With inputs from PTI