Monday, October 26News That Matters

What novel fuel pricing norms will mean for IGL, MGL

When a market price determining mechanism is supplied, for producing companies it may possibly also end result in a bigger realisation, says Deven R Choksey, MD, KR Choksey.




On natural fuel marketing reforms

The authorities has accredited the standardised e-bidding course of for natural fuel. The oil minister says that producers can get any platform for e-bidding of natural fuel nonetheless producing companies cannot take part in natural fuel bidding. On the opposite hand, subsidiary companies can take part in the course of. We are able to must glimpse into detail all thru time nonetheless more critical to me may possibly be the pricing half of it.

Whereas you open striking across the pricing in an originate platform, it manner that you simply may possibly perchance possibly also very smartly be permitting the market price to get determined as against the authorities dictating the price and right here’s a principal switch. I’m utterly chuffed about this due to for the producing companies when the market price determining mechanism is supplied, it may possibly also very smartly be ready to end result in a bigger realisation. This may possibly additionally very smartly be ready to enable them to picture a bigger price.

Influence of most contemporary norms on IGL, Mahanagar Gasoline


This reform is in actuality suggesting a market driven pricing mechanism both for procurement moreover distribution of fuel. IGL and MGL are utility companies that will perchance infrequently be engaged on the unfold. And now that the total sector is unfolded, they would beget a aggressive bidding course of taking situation and so they would be ready to take their resources for the fuel which are priced on different platforms in accordance to their skill to develop so.

I’d think they would beget a bigger mechanism to coast on this particular price to the kill prospects. They would be ready to shield their spreads. From an investment point of glimpse, one would glimpse at these companies more on the muse of interior fee of return (IRR) that they generate and the return they’re producing out of it.

One would cherish to beget these shares in the portfolio nonetheless more importantly, considered against the complex fuel pricing mechanism which the authorities extinct for determining price in accordance to four different countries fuel pricing and averaging them out, bringing the total thing on the market platform gives me a decent amount of self belief that these companies would be in a critically better design to space up their purchases and yield better realisation out of it.

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