Earlier as petrol price was increasing companies were saying they are in loss hence increasing price.But geeks saying all are cash rich with each of them sitting on at least 4000+ crore cash.

Then as new petrol pumps news came out geeks started questioning that shows companies have money in cash. Companies crying they not getting cash subsidy on time hence no point but just increasing price.

Gas international price is going high so was lng and cng and png price increased. Hence positive outlook given for gujarat gas, petronet lng etc.

Now all of a sudden news coming out that hpcl ioc and others won't have cash to buy stock after December all of a sudden. And price moving close to 52 weeks low level whereas brokers recommended 450 price for hpcl a couple of months back.

Also BG exit for better foreign opportunity also hasn't gone well with the market.

Hence where are these sectors going?

At one side it's said now the next rally will be in these sectors but all of a sudden with europe crisis entering italy coming out a lot of negative look coming out.

I don't think any of the oil refineries have any spare cash left. The only cash that these companies are having is the cash that they need for daily operations.

Even if the Rs 4000 crore figure was correct, it is too small an amount for the PSU oil refineries.

At the end of FY 2011, IOC had debt of Rs 53000 crore, HPCL has debt of 25000 crore and BPCL has debt of 19000 crore.

In the last few months, Indian rupee has lost more than 10% of its value. This has increased the cost of crude oil imports. Unless these costs are fully passed on to the consumers or the government starts contributing more to subsidies, oil companies will have no cash left by the end of 2011 - not even for their operations.

IOC says finances so bad, it may have to shut units - Money - DNA

These companies are losing much more money on diesel than on petrol.

The only way to bring these companies back to profit is to increase the price of diesel, which isn't an easy thing to do.

As long as the Congress stays in power, I don't see any hope for the oil refining companies.

The gas sector isn't much better. Sooner or later, the government will also kill the gas sector for political gains.

Investors will do themselves a great favor by avoiding these stocks.

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So an avoid.

Which sector you look bullish to you Alchemist?

It is true not only for Oil & Gas, but the power sector lenders too. Sorry state of affairs everywhere.

After my experience with REC I have stopped looking at PSUs altogether. There are much better private companies.

Consumer goods especially consumer goods that are non-discretionary in nature (FMCG).

I will make a separate post to explain my view (I don't want the thread to go off-topic).

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Fine no problem.

But i failed to get the point that gas sector will also start bleeding because of government deed.I read somewhere cng providing companies doesn't worry much about hike as they don't face similar trouble like petrol and diesel.

Also i am seeing companies like igl and petronet lng still doing good in negative market. But british gas exit in gujarat gas is seen as big negative.Though news even was floating that mukesh ambani might be buying those gujarat gas share from here he might enter his shale business.

Any inputs?

From what I heard last time GAIL and OIL INDIA are cash rich companies. Do you think the cash will be eroded in this current market scenario for oil and gas companies?

In gas which are the companies to watch out for?

I feel 2 sectors now to bet for future is gas and solar.

According to valuations which companies are good? Some are trading at 52 weeks low level whereas some are still showing no sign of degradation in valuation.

Petronet lng, Gujarat gas, GAIL, Gujarat state petronet, Indraprastha gas etc

Beware. The Government is hard-pressed for money. It may find some underhand way of looting this cash!

Any PSU in good financial condition does not necessarily make it a good investment. It dosen't take much time for a desperate government to convert it to one with a not-so-good condition.