CLSA believes that the proposed amendments to gas transmission tariffs by PNGRB could offer significant upside for gas transmission companies like GAIL and GSPL. The reforms, currently open for public consultation, aim to introduce greater flexibility in cost pass-through and volume-based assumptions. If finalized by June 2025, these could lead to higher tariffs for transmission players.
However, the brokerage noted a potential reduction in operating expenditure (Opex) for city gas distributors like Indraprastha Gas Ltd (IGL) and Mahanagar Gas Ltd (MGL), while marginally raising costs for other industrial gas users such as Gujarat Gas (GGas) due to changes in input pricing.
Overall, CLSA sees this as a positive structural change for gas infrastructure companies, with limited downside for downstream players, while the final outcome will depend on the ongoing regulatory process.
