The new gas tariff proposal based on the cumulative transmission capacity is expected to prune GAILNSE -1.45 % (India)’s earnings by over 25%. This together with lower domestic gas demand due to economic slowdown may affect its stock in the near term. It has underperformed the Nifty Energy index by 6% in the past three months.
In the last week of June, the Petroleum and Natural Gas Regulatory Board (PNGRB) proposed a new gas tariff structure wherein the volume divisor in the tariff equation will be based on the total gas transmission capacity of a company. The volume divisor helps in ascertaining the utilisation rate of the pipeline depending upon its age.
