GAIL shares plunges over by 6% soon after transmission tariff revision by PNGRB

After the long-awaited transmission tariff revision orders were issued by the PNGRB on Thursday, the shares of state-owned GAIL have fallen down by over 6% in the early trading on Friday. According to the revised tariffs, the new transmission tariff levy will be Rs 65.7 per Million Metric British Thermal Unit (MMBtu) as against current price of Rs 58.6 per MMBtu.

This signifies a 12% increase in tariffs from the current levels.  However, the revision in tariff is lower than the Rs 78 per MMBtu that the company had sought. As per the reports, the new tariff will be effective from 1st January, 2026 and the new review will be done on April 1, 2028.
 

GAIL Chairman Sandeep Kumar Gupta in March 2025 had stated that the company would likely get up to a 35% rise in the integrated tariff for transporting natural gas through its pipeline network, potentially boosting the firm’s pre-tax earnings by as much as Rs 3,400 crore annually. The levelized tariff of the integrated pipeline network, which carries about 90% of the volume as of date, stood at Rs 58.61 per million British thermal units.
 

The revision in the integrated tariff including power plants, fertiliser units and city gas operators pay for receiving gas through GAIL's 10 pipelines is primarily driven by the need for the company to cover increasing operational and maintenance costs while also incentivising further investment in the pipeline infrastructure.

Since 2018, the tariffs for this regulated segment have not been revised, despite significant expansion in GAIL’s pipeline grid and rising capital expenditure. However, PNGRB has clarified that to ease the tariff hike and to avoid a sudden increase, it has decided to provide only interim relief to GAIL for now and will fully reflect adjustments to all other parameters in the next tariff review in FY28.