GAIL down in the red
GAIL is not doing too well today morning. The stock today opened at a loss of -5.45% at Rs.338.95, going down 10% to Rs.322.85.
The market is very disappointed because the much awaited tariff did come in but not as much as it should have been.
The Petroleum & Natural Gas Regulatory Board (PNGRB) approved an integrated tariff rate for two of the key pipelines managed by GAIL. It is 18% more than the earlier rate but 58% lower than what GAIL had asked for.
The PNGRB approved a single tariff for the integrated Hazira-Vijaipur-Jagdishpur network. From Rs.25.46/mBtu for users since 2008 and Rs.53.65/mBtu for those using since March 2010, the one price for all stands at Rs.41.11/mBtu. With 60% of its transmission coming from this pipeline, the lower-than-expected tariff hike will not boost the earnings as much.
This new tariff has already come into effect from 1st April 2019 and the next review will now happen after three years.