Shares of energy companies like Reliance Industries Ltd (RIL), ONGC and Oil India jumped on Friday, a day after the government announced a considerable increase in the price of natural gas.
The government on Thursday increased the price of natural gas from current price range of $3.5-5.73 per million metric British thermal units (mmBtu) to $8.4 per mmBtu.
The new price will take effect from 1st of April, 2014, for a period of five years.
ONGC shares gained more than 10 per cent in early trade on Friday, while RIL and Oil India shares gained as much as 4.3 per cent and 7.8 per cent, respectively.
Government-run ONGC expects the hike in the price of natural gas to generate additional annual profit of around Rs 8,000 crore. Aloke Banerjee, finance director at ONGC, added, "We should see this increase provided other things remain the same and there are no conditions attached."
However, by noon the stocks started losing most of their morning gains. At quarter past noon, ONGC shares were trading merely 2 per cent higher at Rs 327.80 a piece. RIL shares were at Rs 852.70 apiece, at a gain of 2.5 per cent; while Oil India slipped 3 per cent to Rs 556.75 apiece.
Source: Top News