Citi has highlighted potential positives for gas transmission players like GAIL and Gujarat State Petronet Ltd (GSPL) following proposed amendments by the Petroleum and Natural Gas Regulatory Board (PNGRB). These changes could significantly impact tariff determination for pipeline operators.
One key proposal is allowing fuel costs—especially contractual LNG prices—to be claimed more effectively under the tariff structure. This stands to benefit GAIL meaningfully. Another change suggests more lenient volume assumptions once normative volumes surpass 75% of capacity, a shift that could improve realizations for GSPL.
While final decisions are still pending public consultation and regulatory review, Citi believes these changes represent a constructive move for the sector. These reforms may improve profitability for transmission players without materially impacting end-user pricing in the short term.
