Tariff Transformation: GAIL's Strategic Pipeline Move

GAIL (India) Ltd is expected to see up to a 35% tariff increase for transporting natural gas, potentially boosting pre-tax earnings by Rs 3,400 crore annually. This revision aims to cover rising operational costs and promote pipeline investments, aligning with government goals to increase natural gas usage.

GAIL (India) Ltd is poised for a significant financial boost with an expected tariff increase of up to 35% for its natural gas transportation network. The move is projected to enhance the state-owned company's pre-tax earnings by as much as Rs 3,400 crore annually, according to Chairman Sandeep Kumar Gupta.

The transport tariff revision, covering 90% of GAIL's pipeline volume, aims to address escalating operational and maintenance expenses while encouraging infrastructure investment. The Petroleum and Natural Gas Regulatory Board (PNGRB) is soon to approve the revised pricing structure.

India's government is set on elevating natural gas's role in the energy sector from 6.2% to 15% by 2030, prompting GAIL to expand its pipeline network. The tariff adjustment aligns with governmental policies to promote natural gas, supporting cost coverage and encouraging sector growth.

(With inputs from agencies.)