The government has more than doubled the price of natural gas at the domestic level. Rising gas prices will help ONGC and Reliance Industries to increase margins.
Oil & Gas Stocks: Crude has gained a lot due to geopolitical tension. Due to this, the prices of energy in the international market are increasing continuously. Now the government has more than doubled the prices of natural gas at the domestic level. According to the Petroleum Planning and Analysis Cell (PPAC) of the Oil Ministry, the gas price for the regulated field will now be $ 6.1 per mmBtu against the current $ 2.9 per mmBtu. At present, increasing gas prices will help ONGC and Reliance Industries to increase their margins. At the same time, there can be a negative effect on GAIL. In the future, CNG-PNG can also become more expensive. On the other hand, due to increase in energy prices, oil companies have increased the prices of jet fuel by up to 2 percent. All this will have an impact on the aviation sector apart from oil and gas companies.
these stocks rise
Apart from oil and gas stocks, good action is being seen in aviation stocks in today’s trading. ONGC, RIL, GAIL, OIl india, Indigo and Spice Jet have seen gains during intraday.
Oil & Gas Sector: Positive, Negative for which stock
Brokerage house CLSA says that the increase in gas prices is a big positive for ONGC and Oil India. The way energy prices have been rising in the international market, these reforms are not expected to be reversed in the recent past. At the same time, it has been said in the report that this hike can be manageable for IGL or MGL. However, there is concern about the second half margin for them with the increase of October 2022.
Brokerage house Morgan Stanley says that it is positive for gas producer ONGC and Reliance Industries. Whereas gas midstream players like Petronet LNG and Gujarat Gas may remain under pressure in the mid-term. While brokerage house Nomura says that this will benefit upstream gas producers, while it will be negative for gas consumers. According to Nomura, this will have a negative effect on GAIL.
Impact on Aviation Stock
Swastika Investmart Ltd. Santosh Meena, head of research, says that airline stocks have been underperformers for the last three years. The industry has suffered a lot due to the lockdown and travel ban due to Corona virus. Now due to Russia and Ukraine crisis, oil prices have increased, due to which jet fuel has reached a record level. Due to this, the prices of jet fuel ie Air Turbine Fuel (ATF) are also increasing.
He says that 35-40 per cent of the operating cost of an airline comes from the fuel account. For this reason, the airlines in the last few days have decided to pass on the rising cost of jet fuel to the passengers. This will lead to a sharp increase in airfares. The commercial journey has now come only up to 50 percent of the precovid level. On the other hand, demand can be better due to revenge tourism. The tourism industry is on the way to get back on track. The overall aviation sector will face volatility in the short term, but the long term outlook is better.
At present, from April 1, oil companies have increased the prices of jet fuel by up to 2 percent. After this, the price of jet fuel has reached a record of Rs 1,12,924.83 per kiloliter. Earlier it was Rs 1,10,066 per kiloliter. ATF prices have increased for the 7th time this year.
(Disclaimer: Stock or Sectors advice is given by brokerage house or experts. These are not the personal views of Financial Express. Markets are risky, so take expert opinion before investing.)
,
