GAIL shares surges by 7% on positive tariff reforms by PNGRB
The modifications should be adopted where gas transmission players such as GAIL and GSPL may have increased transmission tariffs.
1.jpg)
The Indian Benchmark index on Monday saw a notable increase in state-run GAIL India's shares of up to 6 percent in response to fresh events concerning the Petroleum and Natural Gas Regulatory Board (PNGRB). The action follows the PNGRB inviting public views on suggested changes to natural gas tariff policies, which should benefit gas transmission companies.
The industry committee has sent ideas and comments to the PNGRB on the natural gas tariff structure. Particularly by means of revised cost pass-through procedures and volume-based assumptions, the suggested reforms seek to provide additional flexibility to the tariff structures.
Join PSU Connect on WhatsApp now for quick updates! Whatsapp Channel
These proposals would modify the Natural Gas Pipeline Tariff Regulations of 2008; the board is soliciting public views on the suggested amendments until April 11, with finalising expected by June 2025.
The modifications should be adopted where gas transmission players such as GAIL and GSPL may have increased transmission tariffs. More precisely, the tariff computation would rely on the negotiated rates for either domestic gas or LNG. Major gas transmission companies may gain if the zonal tariff system were lowered from three zones to two.
The suggested adjustments might result in a 20–30 percent rise in zone one tariffs, therefore directly helping businesses like GAIL. Due to fuel cost adjustments and contractual LNG pricing—which can now be claimed—these modifications are projected to have a major impact on gas transmission firms, especially GAIL, Citi Research said. This has caused Citi to start a 90-day "Positive Catalyst Watch" on GAIL, therefore adjusting their target pricing for GAIL from Rs 260 to Rs 265.
Read Also : HUDCO appoints two Non-Official Independent Directors on Board