LNG duty cuts to boost GAIL's earnings

Petrochem segment would benefit from lower feedstock prices and improving utilisation

The proposed halving of Customs duty on LNG imports to 2.5 per cent was cheered by the Street with most gas-related stocks such as GAIL, Gujarat Gas, Petronet LNG, Indraprastha Gas (IGL), etc. recording gains. While all these companies stand to gain from the duty cut, there are more triggers for GAIL.

The government, in an effort to push LNG imports and improve natural gas availability, has taken the step to cut import duty. City gas distributor IGL uses about 22 per cent of LNG, while Gujarat Gas imports 3.5 million metric standard cubic metre per day (mmscmd) of gas.