GAIL shares slump over 6% on PNGRB’s lower-than-expected transmission tariff revision
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Shares of GAIL (India) dropped as much as 6.5% intraday to Rs 171.80 on the BSE on Friday, following investor concerns around the latest tariff order issued by the Petroleum and Natural Gas Regulatory Board (PNGRB) for the company’s Integrated Natural Gas Pipeline (INGPL) network. The regulatory order revised GAIL’s unit natural gas pipeline tariff to Rs 77.98/MMBTU effective January 1, 2025, up from the current Rs 58.61/MMBTU. However, the revision is lower than expected, given the company’s rising operating and capital costs. According to the tariff filing, GAIL had proposed a levelized tariff based on an economic life of 30 years for the INGPL, projecting cumulative operating expenditure (Opex) of Rs 1.83 lakh crore and capital expenditure (Capex) of over Rs 56,000 crore up to FY2049. Of this, nearly Rs 17,775 crore is future Capex, primarily to maintain ageing infrastructure, some parts of which will be over 60 years old by the end of...