Shares of gas producers like Reliance Industries and ONGC tanked in morning trade on Tuesday after the Election Commission asked the oil ministry to defer new gas price till the general elections are over.
A new pricing regime was to be implemented from next month for all private and public sector natural gas producers under which rates were to rise to $8.3 from the current $4.2 per million British thermal units.
Reacting to the development, shares of Reliance Industries fell as much as 3.53% to Rs 872.60 on the BSE.
Similar movement was seen on the ONGC counter as well where the shares of the company declined 4.54% to Rs 306.60 on the BSE.
The Election Commission on Monday asked the UPA government to defer notifying doubling of price of the fuel produced by companies such as Reliance Industries till general elections are completed.
Market analysts attributed the fall to the EC decision, which means the gas price hike may now be delayed as the new government could review the entire decision and take an independent view.
Though the decision to revise gas prices from April 1, 2014 was first taken in June 2013 and notified on January 10 this year, the oil ministry had approached Election Commission for permission to announce the new price.