Subsidy provisions may reignite interest in ONGC, OIL


Subsidy provisions may reignite interest in ONGC, OIL

ET Intelligence Group: ONGC and Oil India might move beyond their sluggish trading ranges after a year because of the significant increase in oil subsidy provisions in the FY20 interim budget.

State-owned upstream companies are trading at less than seven times their one-year forward earnings and figure among the cheapest exploration and production companies globally due to uncertainties over subsidies.  New Delhi has increased the oil subsidy provision by 62 per cent to Rs 33,700 crore for FY20, in line with Street estimates.

The budget provisions indicate that the government could manage the burden if crude oil remained in the range of $60-65 per barrel and it need not pass the incremental costs on to state-owned oil explorers.  Read More

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