GAIL under pressure on gas price hike reports

MUMBAI: Shares of GAIL were witnessing selling pressure in trade on margin concerns after the Oil Ministry moved a Cabinet note for nearly doubling the price of natural gas produced to $8-8.5 per million British thermal unit in the current year itself.

According to analysts, GAIL uses natural gas as primary raw material for its petchem business. Any hike in gas price would increase the company’s input cost and put pressure on its margins.

The Ministry in a draft Cabinet note proposed accepting in toto the Rangarajan Committee recommendation of pricing domestically produced natural gas at an average of international hub prices and cost of imported LNG instead of present mechanism of market discovery.

At 01:00 p.m.; the stock was at Rs 355.40, down 2.88 per cent on the NSE. It touched a high of Rs 369.55 and a low of Rs 348 in trade today.