GAIL pipeline tariffs may see a 20% increase: Exclusive

India’s state-owned natural gas major, GAIL (India) Ltd., is poised for a significant boost in its pipeline tariffs, with sources indicating a potential increase of nearly 20%. The Petroleum and Natural Gas Regulatory Board (PNGRB) is expected to approve a revised tariff in the range of ₹70 per mmBtu, up from the current rate of ₹58.59 per mmBtu.According to exclusive information, the tariff order could be finalized within the next one to two months. AK Tiwari, the PNGRB board member who spoke to CNBC-TV18 on Tuesday, stated that the board would adopt a “balanced approach” and give due consideration to GAIL’s official submissions.
GAIL has submitted a proposal for a tariff of ₹78 per mmBtu but has signaled to CNBC-TV18 that a revision of ₹70 – ₹71 per mmBtu would still be viewed as a positive outcome.
The proposed tariff revision is seen as a key earnings driver for GAIL, especially as the company continues to expand its natural gas transmission network across India.Investec is hoping for a 20% increase in tariffs, but is modeling a conservative 10% hike for financial year 2026.

Jefferies expects a tariff hike of around 10%. According to their analysis, a 10% hike could boost GAIL’s transmission Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA), by approximately 13% in the next financial year, while a 20% hike could result in a 26% rise.

Jefferies estimates the fair value of GAIL shares to be ₹235, in a 10% hike scenario and ₹250, in the event of a 20% hike.

Shares of GAIL are currently trading 1.7% lower on Wednesday at ₹189.3. The stock is down 2.2% in the last one month.