Ministries reject proposals of Rangarajan Committee report - Angel Broking View

As per media reports, the Finance, Power and Fertilizer Ministries have rejected the recommendations of the Rangarajan panel, which suggested various measures to boost production and incentivize the oil and gas companies by raising gas prices. Rangarajan committee reports suggested to raise the base price of domestic natural gas to US$8.8/mmbtu from the current US$4.2/mmbtu applicable for gas produced from Reliance Industries' KG-D6 and some other fields. As per Petroleum and Fertilizer ministries, such an increase in gas price would increase the annual subsidy burden by Rs. 16,992cr by the end of the 12th five year plan in FY2017.

We had not factored the recommendations of Rangarajan Committee in our estimates. Hence, we maintain our estimates and ratings for our Oil & Gas coverage universe.

Source : Equity Bulls

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