Deferring gas price hike to be short term negative for RIL and ONGC: Manish Sonthalia

In a chat with ET Now, Manish Sonthalia of Motilal Oswal shares his views on the old and gas sector.

ET Now: How damaging could deferring the gas price hike be for Reliance, ONGC and Oil India?

Manish Sonthalia: The gas price decision had been taken sometime back. Now that EC wants to delay the price hike notification after the election results are out, there might be something more to do with the price hike. This could be short term negative for Reliance and ONGC.

ET Now: Will today's reaction in Reliance and ONGC be rather sentimental?

Manish Sonthalia: Straightforwardly, this would be the implication, but this gas price was supposed to increase from April 1, 2014 and everybody knew about it. So, there could be something more to Election Commission's decision to postpone the notification beyond the results announcements.

One can't take it for granted that 8.4 is coming, now that the delay has happened. For the time being, it could be called as sentimentally negative, but we do not know. It could be that the gas price notification could be less than 8.4.