In an interview to CNBC-TV18 Prayesh Jain, AVP – Research, IIFL shared his reading and outlook on the oil and gas sector. On Monday, the government announced that CNG prices will be cut by about Rs 15 per kg and cooking gas piped to kitchens by about Rs 5 after it decided to supply cheaper domestic gas to fuel retailers in cities like Delhi and Ahmedabad.
Below is the verbatim transcript of Prayesh Jain’s interview with Sonia Shenoy and Latha Venkatesh of CNBC-TV18. For the complete interview watch the accompanying video.
Q: Who loses if that 20 percent gas comes to buyers like Indraprastha Gas , what is it in terms of quantity and who do ayou think loses that cheap gas?
A: In terms of quantity, it is not pretty large. The current consumption of IGL is somewhere around 3.5-4 mmscmd and 20 percent of that would work out to around at 8 mmscmd. It is more of a policy thing that we need to get back to. Is the government backtracking on the oil and gas reforms that it has been taking about? Because gas price hike that is expected will impact them – whether these companies will be actually priced at USD 8.2 per mmbtu because the gas prices will need to be raised again by Rs 10 per KG as IGL management mentioned. Will it be a lower price like the government has been talking for power and fertilizers? So it is all of that issues that needs to be focused on from now on. Read more