Oil & Gas - Draft Kirit Parikh Committee Recommendations – A Positive Development For CGDs: ICICI Securities

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .ICICI Securities Report.As per news reports, the draft recommendations of the Kirit Parikh Committee imply:Current domestic gas prices for priority segment will be capped at $6.5-7/metric million British thermal unit (current prices at gross calorific value basis of $8.6/ mmbtu, implying a delivered price on net calorific value of $9.6/mmbtu),annual escalation of $0.5/ mmbtu for the next few years,a gradual move to market pricing of gas in three-four years. We do not have access to the draft report, hence, we are not sure of what price has been determined for the hitherto premium gas price eligible fields. However, given the mandate to encourage investments in new gas assets, we would assume premium gas pricing would have some linkage with term LNG prices and hence, this will remain lucrative for Reliance Industries Ltd. and Oil and Natural Gas Corporation Ltd.’s new gas production. Overall, ~$2/mmbtu reduction in FY24E effective gas cost for priority sector has Rs 7.7/8/1.2 per kg implication for CNG and Rs 4.9/5/0.8 per standard cubic metre implication for the domestic segment of Indraprastha Gas Ltd., Mahanagar Gas Ltd. and Gujarat Gas Ltd..Click on the attachment to read the full report:.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Oil & Gas - Draft Kirit Parikh Committee Recommendations – A Positive Development For CGDs: ICICI Securities

The draft recommendations are a material relief to the gas sector which has seen the macros turn deeply unfavorable.

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