GAIL India shares surge 8% as PNGRB proposes unified pipeline tariff

GAIL India’s shares were trading at Rs 426.30 up by 7.58% on Friday morning.

GAIL India’s shares surged nearly 8% in an early trade on Friday after the Petroleum And Natural Gas Regulatory Board (PNGRB) floated a consultation paper on the unified pipeline tariff proposing a 60% hike by the company. GAIL India’s shares were trading at Rs 426.30 up by 7.58% on Friday morning.

PNGRB board member Satpal Garg said on Friday that the regulatory authority has initiated a consultation paper on the request of GAIL to take views of all the stakeholders on the unified pipeline tariff, ruling out “benefit to any single entity”. “A proposal has been initiated on the request of GAIL but it is not going to benefit any single entity. PNGRB is not proposing any number, the number mentioned in the consultation paper is what GAIL proposed. It is subject to verification,” Satpal Garg told ET Now.

The proposal has been approved by the Cabinet Committee on Economic Affairs (CCEA) but the petroleum ministry is yet to decide on it. The decision will be taken by the ministry after PNGRB’s recommendations.

Welcoming the move from PNGRB GAIL Marketing Director Gajendra Sing said, with the unified tariff, we are looking at the equitable growth for the industry. Speaking with ET Now Gajendra Sing said, “Unified tariff may mean a marginal increase in overall tariff but ensures investors into gas pipelines have similar costs.”

GAIL, however, said it is difficult to quantify actual increase or decrease in the tariff at this point, but claimed that the unified tariff will bring down prices in the north-east and other eastern states. Satpal Garg also said that unified tariff will make gas affordable in major parts of India, but the consumers who live near a single pipeline area source will have to pay a higher price for gas if the proposal is passed. He further said that the system fixing the tariff will be same as it was earlier.