All content in this website is sourced legitimately

Page No: 1
GAIL: Monopoly under threat
Aug 14: The honeymoon seems to be over for GAIL and a long rough patch is now looming ahead.
8The gas trading business is not longer going to be smooth as its monopoly comes under threat. Already, EBIT in this segment declined 23% YoY (+21% QoQ). This is more due to only a partial conversion of short-term contracts to long-term contracts. Customers are not buying GAIL's argument on this front and they want to keep their choices open.
8But more competition is likely to keep margins under pressure.
8ONGC, for example, would have the right to sell HPHT gas from the KG Basin to end-consumer. And end consumer may decide which pipeline to choose. There is now competing pipelines emerging out of the KG Basin
8Potential liability led by price differential on its US LNG contracts is, of course, the biggest risk
8Decision on a single tariff for the whole nation by year-end will be to GAIL's disadvantage and is meant primarily to benefit customers.
Click on Reports for more


**********************************

Back  |  Top