GAIL Chairman Sandeep Kumar Gupta Predicts Continued High Oil and Gas Prices Amid Market Conditions

GAIL India is optimistic about the energy sector's prospects under US President Donald Trump's second term. Chairman Sandeep Kumar Gupta anticipates that oil and gas prices may not decrease immediately. During the World Economic Forum Annual Meeting, Gupta mentioned GAIL's plans to increase capital expenditure to Rs 10,000-12,000 crore over the next 3-5 years for ongoing gas pipeline projects.

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Gupta highlighted GAIL's significant role in India's natural gas infrastructure. "We are the largest natural gas pipeline company in the country and have already laid the lion's share of the existing pipelines," he stated. This year, GAIL is completing several pipeline projects, including the Kochi-Mangalore-Bangalore and Gurdaspur-Jammu pipelines.

Energy Sector Developments

President Trump has declared an energy emergency to boost oil and gas exploration in the US. Gupta noted this could eventually ease pressure on prices. However, he cautioned that price relief might take time due to paused LNG export facilities under the Biden administration. "Lifting these pauses will take time," Gupta explained.

GAIL is also expanding its petrochemical presence. The Usar project, India's first Propane Dehydrogenation Polypropylene unit, is expected to be completed this year. Additionally, GAIL acquired a 1.25 million tonne PTA facility from JBF Petrochemicals in Mangalore, which will also be operational soon.

Budget Expectations and GST Inclusion

Gupta expressed hopes for relief in the upcoming Union Budget on February 1. He expects the removal of compression charges on CNG activities, which he considers burdensome for both GAIL and consumers. "I expect the 14 per cent excise duty on compression is removed immediately," he said.

Although GST coverage isn't part of the budget, Gupta hopes for steps towards including natural gas under GST. He believes this would benefit the industry significantly.

GAIL's net-zero plan has been advanced from 2040 to 2035, requiring an investment of Rs 38,000 crore. The company aims to increase its annual capital expenditure from Rs 8,000-10,000 crore to Rs 10,000-12,000 crore over the next few years.

"We have presence in petrochemicals too," Gupta added, highlighting GAIL's diverse portfolio. The company's growth strategy includes expanding its petrochemical capacity to 3 million tonnes annually.