ONGC seeks gas price hike
ONGC has sought a steep hike in the price of gas to Rs 4,500 per thousand cubic metre from the present Rs 3,200 per thousand cubic metre, reports Deepak Joshi.business Updated: Sep 19, 2007 21:18 IST
State-owned Oil and Natural Gas Corporation has sought a steep hike in the price of gas to Rs 4,500 per thousand cubic metre from the present Rs 3,200 per thousand cubic metre. The Tariff Commission had recommended a minimum producer price of Rs 3,600 per thousand cubic metre in May.
Speaking to mediapersons on Wednesday after the 14th annual general meeting, ONGC Chairman and Managing Director RS Sharma said: "We are hoping the price of administered price mechanism gas would be raised to Rs 4,500 per thousand cubic metre (excluding royalty) from the present Rs 3,200 per thousand cubic metre. The Tariff Commission had stated that the market had a capacity to pay prices higher than their recommendation."
The government had agreed in principle to raise the price of administered price mechanism gas and a final decision was awaited. "We hope we should be able to get a fair deal as the Reliance issue has been resolved, and we expect the government to take a decision soon. We hope to get the market price for new gas," Sharma said.
ONGC hopes to gain Rs 2,000 crore in revenues annually if prices were raised. The company is currently suffering a loss of around Rs 700 crore annually for selling 47-48 million standard cubic metres per day of natural gas below the cost of production.
Answering queries regarding ONGC's share moving on a narrow band in an otherwise booming stock market, Sharma said the company may consider issue of bonus shares and stock split at an "appropriate time". "Last year, we gave bonus and that was not the end of it. We may consider further bonus shares, share split at an appropriate time," he added. Last year, ONGC had allotted bonus shares in the ratio 1:2 to its shareholders.
Meanwhile, ONGC Videsh Ltd, the overseas investment arm of ONGC, has won three exploration blocks in Columbia, Managing Director RS Butola said.