videos | IST

Lower crude demand and higher spot price trend negative; CGD cos may be impacted: Credit Suisse

Mini

Credit Suisse has pointed out that we are seeing concerns or fears due to new variant which may result in lower crude demand, but spot prices are higher, which is actually negative for oil and gas sector in India. City gas companies will be impacted as lower crude impacts CNG conversions as the gas input cost is high.

Credit Suisse has pointed out that we are seeing concerns or fears due to the new variant, which may result in lower crude demand. However, spot prices are higher, which is actually a negative for oil and gas sector in India.
City gas distribution companies will be impacted as lower crude impacts CNG conversions as the gas input cost is high.
Gujarat Gas in particular will be impacted by lower industrial margins. GAIL's 40 to 45 percent of EBITDA is linked to crude prices, so the company's profit reduced on petrochemical and LPG due to lower crude price.
Credit Suisse has said that spot gas price may remain high in the near-term and will continue to impact margins. Additionally, they add that lower demand for refining products, especially jet fuel would impact diesel cracks and also refining margins for Reliance as well as for the OMCs.
However, the telecom tariffs that we have seen in the last few days will more than offset lower refining for Reliance in particular.
Disclaimer
: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
next story

Market Movers

Currency

CompanyPriceChng%Chng