India's Publicly Listed Oil Companies remain Captive to the whims of the Government

India has a number of large state owned Oil/Gas companies most of which are listed on the stock exchange.However these companies are difficult  to value fairly as the government not only owns controlling stakes in these companies but also has a complex system of subsidies which lead to large losses for these companies.If the government  decontrols the oil sector , then the market valuations of these large oil large caps would multiply rapidly due to the removal of these artificial losses.Some of the large companies listed in this space which are subject to government vagaries are

1. ONGC
2. IOC
3. BPCL
4. HPCL
5. OIL India
6. GAIL

Besides these large companies most of which are listed in India’s Nifty Fifty , there are also some smaller players like Chennai Petroleum, Kochi Refineries, Bongaigaon Refinery and Petrochemicals and Mangalore Refinery and Petrochemicals which also see their stock values fluctuate with every new regulation and ruling from India’s government.The inefficiency in the sector brought upon by the misguided policies of the government, last year led to the closing of the entire retail oil/gas network of private players like Reliance and Essar which could not compete with the subsidies given by the state owned PSUs.There has been talk of reforming the oil sector since a long time but no government has taken the pain of bringing reforms leading to continued distortions and inefficiences.

ONGC climbs 11 pc on BSE on natural gas price hike – Economic Times

Shares of oil companies led by ONGC surged by nearly 11 per cent on the BSE, a day after the government more than doubled the prices of natural gas to cut the losses suffered by oil companies. Shares of ONGC jumped nearly 11 per cent to a high of Rs 1,141, and OIL India climbed to Rs 1,255, up nearly 9 per cent on the Bombay Stock Exchange, in the morning trade.

Yesterday, the Cabinet hiked the prices of natural gas sold to power, fertiliser and city-gas projects from Rs 3,200 per thousand cubic meters ($1.79 per million British thermal unit) to Rs 6,818 per thousand cubic meters ($3.818 per mmBtu). After adding royalty, the price for user industries would be Rs 7,500 or $4.2 per mmBtu, at a par with the rate at which Reliance sells its gas.