Govt doubles APM gas prices :-After a 5-year long deliberation, the Cabinet on Wednesday more than doubled the price of gas under the administered pricing mechanism (APM) to USD 4.2 million British thermal units (mmBtu), the price at which Reliance Industries sells its gas at from KG-D6.
The Oil Ministry wanted a 44% hike from USD 1.79 mmBtu to USD 2.6 mmBtu. The government has gone ahead more than doubled the price to USD 4.2 mmBtu proving that it can actually move on reforms. In terms of the financial impact of course it is known that ONGC’s FY11 EPS should be impacted by about Rs 14-15, it adds about Rs 3,000 crore to its bottom line. For Oil India it adds about Rs 600-700 crore in revenues, in terms of the bottom line it should be about Rs 350 crore.
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