GAIL Share Price: Stocks Of City Gas Distribution Companies Gain Over 6 Per Cent After PNGRB Proposes Amendments To Tariff Regulations

GAIL Share Price: GAIL (India) Ltd, Indraprastha Gas Ltd, Gujarat State Petronet Ltd share price gained up to 6 per cent on the NSE on March 24. Shares of the city gas distribution companies surged in early trade following an update from the Petroleum and Natural Gas Board (PNGRB).

Earlier on March 21, the PNGRB said in a notice that it had received a request from the Industry Committee. The committee has made several suggestions related to tariff determination. Based on the suggestions the PNGRB also said that it proposes to amend the Petroleum and Natural Gas Regulatory Board (Determination of Natural Gas Pipeline Tariff) Regulations, 2008.

“PNGRB is in receipt of a request from the Industry Committee (IC) wherein the IC has provided Suggestions/ Comments on various regulations pertaining to Tariff Determination for amendment/change. Based on the same, it is proposed to amend the Petroleum and Natural Gas Regulatory Board (Determination of Natural Gas Pipeline Tariff) Regulations, 2008 (“NGPL Tariff Regulations”) as per Annexure-1. PNGRB seeks comments/ views on the proposed changes to the Petroleum and Natural Gas Regulatory Board (Determination of Natural Gas Pipeline Tariff) Regulations, 2008,” PNGRB said.

The PNGRB has proposed that the tariff calculation on the price of gas should be based on contracted prices for domestic gas or liquid natural gas (LNG). The regulatory body stated in the proposed amendment that the number of zonal tariffs should be reduced to two from the existing tariffs which are based on three zones.

The amendment states that zone one tariffs should be applicable for Compressed Natural Gas (CNG) and domestic Piped Natural Gas (PNG). Additionally, customers beyond the first 300 km of the length of the pipeline will be part of zone two.

The PNGRB has sought comments on the proposed changes to the Petroleum and Natural Gas Regulatory Board. The comments can be submitted till April 11 and following the submission of comments the PNGRB will hold an open house on April 15.

The PNGRB also said in its proposal that pipeline entities will be allowed to retain 50 per cent of incremental revenues, provided their actual volumes cross the normative threshold of 75 per cent capacity utilisation.

Following PNGRB’s notice, shares of city gas distributors rallied on March 24. GAIL shares surged over 6 per cent to hit an intraday high of Rs 186.4 apiece on the NSE. Indraprastha Gas Ltd shares surged over 5 per cent to hit an intraday high of Rs 208.88 apiece and Gujarat State Petronet Shares gained nearly 5 per cent to hit an intraday high of Rs 302.6 apiece.

Shares of the three city gas distributors also emerged as the top gainers among the constituents of the Nifty Oil and Gas index. The Nifty Oil and Gas index also surged 1.76 per cent to hit a day high at 10729.9 levels. At the time of writing, the index traded at 10,702.10 levels up by 1.5 per cent.

GAIL Share Price History

In a year shares of GAIL Ltd have gained over 4 per cent on the NSE. On a Year-to-Date (YTD) basis shares of GAIL have declined over 4 per cent and in six months the stock has fallen over 18 per cent. In a month the company’s shares have climbed over 9 per cent and in five days the stock has climbed nearly 16 per cent.

At the time of writing shares of GAIL traded at Rs 183.73 apiece up by 4.96 per cent on the NSE. Shares of Gujarat State Petronet Ltd traded at Rs 294.3 apiece up by 1.94 per cent and Indraprastha Gas Ltd shares traded at Rs 203.94 apiece up by 2.93 per cent on the NSE.