The Election Commission’s directive to the government asking it to defer the revision of natural gas prices till the formation of a new government caused selling pressure in Reliance Industries Ltd. (RIL) and Oil India counters on Tuesday.
RIL stock closed with a loss of 2.87 per cent at Rs.878.6. Oil India closed at Rs.471.70, down 2.75 per cent.
However, ONGC and Cairn India, which had come under selling pressure in the earlier part of the day, closed with a loss of 1.10 per cent and 0.55 per cent, respectively.
RIL declined to comment on the issue. According to officials familiar with the issue, it was up to the government to announce the revised gas price which should have come into force from April 1, 2014.
The Confederation of Indian Industry (CII), in the meanwhile, said the EC’s decision would go against the stated government policy and adversely impact investment decisions of the oil and gas industry.
“We would like to reiterate that it is only a computation decision where the formula is pre-fixed on the basis of a Cabinet decision. The decision to hold back price revisions could have a long-term impact on the investment climate in this crucial sector,” Kris Gopalakrishnan, President, CII, said.
“To keep gas prices suppressed at the existing level, which is almost at half the estimated revised prices, will come as a bonanza for poll-bound consumers, which, by itself, may be treading on the model code of conduct,” CII said.
