In a move aimed at pleasing the masses before the general elections, CNG prices will be cut by a steep Rs 15 per kg and piped cooking gas by Rs 5 after the government rejigged domestic gas supplies to raise allocations to fuel retailers in cities such as Delhi and Ahmedabad.
As a consumer, ex- ONGC boss RS Sharma is happy about the CNG price cut, but as a oil and gas sector veteran, he sees very little economic logic to the "populist" move by the government.
In a move aimed at pleasing the masses before the general elections, CNG prices will be cut by a steep Rs 15 per kg and piped cooking gas by Rs 5 after the government rejigged domestic gas supplies to raise allocations to fuel retailers in cities such as Delhi and Ahmedabad. Prices of CNG, or compressed natural gas, in the national capital had been hiked by Rs 4.50 last month to Rs 50.10 a kg after retailers such as Indraprastha Gas Ltd (IGL) were forced to buy a fifth of their gas (LNG) requirements from overseas. "I feel deeply concerned being a veteran from this industry that the way these PSU companies are being treated I would only say this is bad governance from the part of sovereign government," Sharma told CNBC-TV18 in an interview.
Menaka: What do you make of this gas price cut for retail consumers even though as the Gas Authority of India (GAIL) chairman told us this could be fairly debilitating in a sense for non-core consumers or industry consumers as he put it?
A: As a consumer, we will welcome the news because PNG (domestic) as well as CNG (transport) prices are going down. So, consumers should be happy. However, if you look at the other part of it, I feel it is out and out populist measure. It defies any kind of economic logic. All the reforms agenda that the government has been preaching all along, that we will reduce the under-recoveries and the burden on the companies would be lesser — where is that? Within a matter of days there is a big turnaround. So, what is the motive? What is the objective? It is quite obvious.
So, I feel deeply concerned being a veteran from this industry that the way these PSU companies are being treated, I would only say this is bad governance from the part of sovereign government. The government keeps preaching these companies to observe good governance practices. But when it comes to the government, as a majority shareholder, where is the interest of the minority shareholders? Where is the share price of this India Oil Corporation ( IOC ), Hindustan Petroleum Corporation Ltd ( HPCL )—leave aside Bharat Petroleum Corporation Limited ( BPCL ) thanks to that upstream they are doing well—that Oil and Natural Gas Corporation (ONGC) also getting a beating. So what about the minority shareholders holding shares in these companies?
Source: Moneycontrol
As a consumer, ex- ONGC boss RS Sharma is happy about the CNG price cut, but as a oil and gas sector veteran, he sees very little economic logic to the "populist" move by the government.
In a move aimed at pleasing the masses before the general elections, CNG prices will be cut by a steep Rs 15 per kg and piped cooking gas by Rs 5 after the government rejigged domestic gas supplies to raise allocations to fuel retailers in cities such as Delhi and Ahmedabad. Prices of CNG, or compressed natural gas, in the national capital had been hiked by Rs 4.50 last month to Rs 50.10 a kg after retailers such as Indraprastha Gas Ltd (IGL) were forced to buy a fifth of their gas (LNG) requirements from overseas. "I feel deeply concerned being a veteran from this industry that the way these PSU companies are being treated I would only say this is bad governance from the part of sovereign government," Sharma told CNBC-TV18 in an interview.
Menaka: What do you make of this gas price cut for retail consumers even though as the Gas Authority of India (GAIL) chairman told us this could be fairly debilitating in a sense for non-core consumers or industry consumers as he put it?
A: As a consumer, we will welcome the news because PNG (domestic) as well as CNG (transport) prices are going down. So, consumers should be happy. However, if you look at the other part of it, I feel it is out and out populist measure. It defies any kind of economic logic. All the reforms agenda that the government has been preaching all along, that we will reduce the under-recoveries and the burden on the companies would be lesser — where is that? Within a matter of days there is a big turnaround. So, what is the motive? What is the objective? It is quite obvious.
So, I feel deeply concerned being a veteran from this industry that the way these PSU companies are being treated, I would only say this is bad governance from the part of sovereign government. The government keeps preaching these companies to observe good governance practices. But when it comes to the government, as a majority shareholder, where is the interest of the minority shareholders? Where is the share price of this India Oil Corporation ( IOC ), Hindustan Petroleum Corporation Ltd ( HPCL )—leave aside Bharat Petroleum Corporation Limited ( BPCL ) thanks to that upstream they are doing well—that Oil and Natural Gas Corporation (ONGC) also getting a beating. So what about the minority shareholders holding shares in these companies?
Source: Moneycontrol
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