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Amidst the overhang and risks of subsidy sharing, stocks of all public sector (PSU) oil and gas companies have seen sharp cuts recently. GAIL, too, fell about 12 per cent in October, before seeing some rebound in the past two days. While the government has not indicated of any move to push PSU oil companies to share subsidy, says Nilesh Ghughe at HDFC securities if it does, GAIL stands to be the last in the pecking order, while ONGC/OIL India would be first ones to share subsidy burden followed by oil marketing companies. Hence, there is least risk for GAIL. Moreover, on the earnings front, there are multiple triggers. Higher crude oil prices support GAIL's earnings by way of rising realisation in petrochemicals business and higher trading margins. Foreign brokerage, CLSA recently said that GAIL is their preferred play on higher crude prices (along with ONGC and Vedanta), as this may raise spreads in its LPG production business and could also mean higher LNG trading margins. The spot .

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