Tariff revision for GAIL India pipelines expected by September, sources say
Published on 19/08/2025 04:27 PM
Tariff revision for GAIL India pipelines expected by September, sources sayA Petroleum and Natural Gas Regulatory Board (PNGRB) member indicated last month that tariffs could rise by as much as 20%, but the regulator has declined to comment on the matter.By CNBCTV18August 19, 2025, 4:27:42 PM IST (Published)2 Min ReadPetroleum and Natural Gas Regulatory Board (PNGRB) is likely to announce revised tariffs for GAIL (India) Ltd’s pipelines by early September, sources told CNBC-TV18.
The regulator’s board is expected to meet in the first few days of September to take up the matter, the sources said. PNGRB may clear other pipeline-related issues in its August meeting.
A PNGRB member indicated last month that tariffs could rise by as much as 20%, but the regulator has declined to comment on the matter.
The regulator is expected to approve a tariff of about ₹70 per mmBtu, higher than the current ₹58.59 per mmBtu. While GAIL had initially proposed a revision to ₹78 per mmBtu, the company has indicated that a ₹70–71 tariff would still be a positive outcome.
The proposed hike comes at a crucial time for GAIL, which operates India’s largest gas transmission network spanning over 15,400 km. Tariffs for this regulated segment have not been revised since 2018, despite significant expansion in GAIL’s pipeline grid and rising capital expenditure. Transmission earnings account for roughly a third of GAIL’s overall EBITDA, making tariff revisions a critical driver of profitability.
Brokerages see meaningful upside from the revision. Investec, which had been hoping for a 20% hike, has factored in a more conservative 10% increase in its FY26 estimates. Jefferies also models a 10% hike, noting that this could lift GAIL’s transmission EBITDA by about 13% in FY26, while a 20% rise could drive a 26% jump. The brokerage pegs GAIL’s fair value at ₹235 per share under a 10% hike scenario, and at ₹250 if tariffs are raised by 20%.
GAIL’s tariff increase also ties in with India’s broader push to raise the share of natural gas in its energy mix from 6% to 15% by 2030. The company is spearheading investments in cross-country trunk pipelines, including the Jagdishpur-Haldia-Bokaro-Dhamra project and the Kochi-Mangalore-Bengaluru line, to strengthen supply infrastructure.Continue ReadingCheck out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!TagsGail Indiashare market today