Indraprastha Gas burns bright
Indraprastha Gas is amongst the top gainers of the day currently, up over 4% at Rs.288, with an intra day high at Rs.289.90. Volumes are up over two times.
The stock is in the limelight as there is now just a week to go for the gas price hike to get effective as the deadline of 1st April looms large. The news is that the price hike would be big – up from $4.2 per million metric British thermal units (mmBtu) to around $8 per mmBtu. But with the election process on, there is also talk of the Election Commission sitting on judgement on this gas pricing but frankly, this price hike was initiated much before this Model Code of Conduct kicked in and the EC’s mandate is conduct fair elections and not judge price hikes.
On the other hand, ministries of oil, finance and commerce have approached the EC to increase the price of domestically produced gas while there are petitions against the price hike, which is also pending with the Supreme Court and is expected to begin hearing today.
Indraprastha is expected to pass on the increased cost of CNG to the customers and news is that it will hike prices by at least Rs.10/kg from 1 April. It currently sources around 70% of its CNG requirement domestically and the rest is through imports, which is much more costly.