Oil & Gas - Gas price hike sans clarity - Emkay

- CCEA approves natural gas price at $8.4/mmbtu, significantly higher than our and street expectations at $6.7/mmbu

- ONGC and OIL are the biggest potential beneficiaries, while RIL has a limited positive impact on profitability.

- In the longer run, RIL would be the biggest beneficiary, since it would benefit from greater commercial viability of other discoveries. Thus, we expect increase in reserves and production in the future.

- However lack of clarity prevails on methodology for accounting of difference between "output price" and "input price". Hence we perceive risk to potential earnings scenario if government places a higher subsidy burden on ONGC/OIL.

Source : Equity Bulls

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