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Gas stocks were on fire accompanied by huge volume on Friday morning as television channels splashed the reported refusal of the Supreme Court to stay the order of the Delhi High Court in the case involving Indraprastha Gas and gas regulator.
The Dehi High Court had ruled that the Petroleum and Natural Gas Regulatory Board did not have the power to fix any component of network tariff or compression charges for any entity having its own distribution network.
But at least in case of one stock - Gujarat Gas Ltd - the rally proved to be shortlived as probably investors realised that the case did not relate to the company but another entity.
Indraprastha Gas had earlier approached the Delhi High Court contesting the directive of PNGRB to cut some tariffs by nearly 60 per cent. PNGRB subsequently filed a 'special leave petition' in the Supreme Court against the order of Delhi High Court on this issue.
On June 1, the Delhi High Court had quashed the PNGRB order asking IGL to cut tariffs. The High Court Bench comprising Acting Chief Justice A.K. Sikri and Justice Rajiv Sahai Endlaw set termed the regulator’s order as “Illegal” and it is not “empowered” to fix or regulate the maximum retail price at which the gas is to be sold by retailers.
IGL had challenged a PNGRB order on network tariff and compression charge issued on April 9.
According to the PNGRB order, IGL can charge Rs 38.58 for every million British thermal unit (a measurement of heat value of fuels) for transmission of gas, against Rs 104.05 that it charges now. Also, CNG compression tariff was pegged at Rs 2.75 per kg. IGL charges Rs 6.66. These rates are to be retrospectively applicable from April 1, 2008.
Shares rally
The shares of IGL, Petronet LNG, Gujarat State Petronet Ltd and Gujarat Gas Ltd spurted in the exchanges today on the back of the interim order issued by the Supreme Court on the issue.
IGL gained Rs 12.45 to move up to Rs 252.75. In fact, it had touched a high of Rs 260.85 before easing a little. There was a huge trading volume of 30.70 lakh shares in the NSE. But the stock is far away from its 52-week high of Rs 454 that it had touched on September 7, 2011.
The rally in IGL stock rubbed on several other stocks in the gas sector. Petronet LNG was up Rs 3.70 to Rs 152 with a trading volume of 10.30 lakh shares.
Gujarat Gas , which opened at Rs 310.95 (previous close Rs 309.10), shot up to a high of Rs 319 but fell later to Rs 308.75, a loss of 35 paise. This counter too witnessed heavy volume of 1.39 lakh shares in the first 90 minutes of trading.
Another gas stock to gain was Gujarat State Petronet Ltd, a GSPC group company, which opened at Rs 68.55 and touched a high of Rs 74.10 before moving down to Rs 72.50. The trading volume was 8.34 lakh shares.
(With inputs from Our New Delhi Bureau.)
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