Oil, Gas Prices Expected to Stay High for Now: GAIL Chairman

Davos: The chairman of public sector major GAIL India, Sandeep Kumar Gupta, has stated that oil and gas prices are likely to remain high in the near term. He expressed optimism about the overall positive impact of US President Donald Trump's second term on the energy sector but noted that any softening in prices may take time. Speaking during the World Economic Forum Annual Meeting, Gupta also mentioned that GAIL plans to scale up its capital expenditure to Rs 10,000-12,000 crore over the next 3-5 years as work continues on multiple gas pipelines and other projects.   He expressed hope that the Union Budget would provide relief on compression charges for CNG and that steps would be taken to include natural gas under GST.  

When asked about the impact of President Trump's second term, Gupta remarked, "The US President is committed to ensuring greater energy availability. An energy emergency has already been declared, focusing on the exploration of more oil and gas to enhance energy efficiency in the US."  He further explained that while this development could benefit the oil and gas sector by increasing availability and easing price pressures, it would take time to materialize. "The Liquefied Natural Gas (LNG) export facilities that were paused by the previous administration are now being revisited. However, restarting these projects will require time, and until then, high prices are expected to prevail," Gupta stated.  

GAIL Chairman Highlights Pipeline Projects, Net-Zero Goals, and Budget Expectations  

Discussing GAIL's operations, Gupta emphasized the company’s leading role in natural gas pipeline infrastructure. "We hold the lion's share of the country’s existing natural gas pipeline network. Many pipelines are expected to be completed within the current year," he said.   He highlighted ongoing projects, including the Kochi-Mangalore-Bangalore pipeline, where the Tamil Nadu section is nearing completion, and the Gurdaspur-Jammu pipeline, which is under active development.  

Oil, gas prices to stay high; GAIL expansion.

Gupta also spoke about GAIL’s presence in petrochemicals, mentioning the progress of key projects. "The country’s first Propane Dehydrogenation Polypropylene unit at Usar is expected to be completed this year. Additionally, we have acquired a PTA facility from the erstwhile JBF Petrochemicals in Mangalore, which is a 1.25 million tonne PTA project. This facility will also be commissioned this year, bringing our petrochemical capacity to 3 million tonnes in the country," he added.   On GAIL’s environmental initiatives, Gupta outlined the company’s commitment to achieving net-zero emissions. "Our net-zero target has been advanced from 2040 to 2035, with an estimated expenditure of Rs 38,000 crore. The current capital expenditure of Rs 8,000-10,000 crore per year will be scaled up to Rs 10,000-12,000 crore over the next 3-5 years," he explained.  

Regarding the upcoming Union Budget, Gupta expressed the company’s expectations. "As a natural gas company, our primary expectation is the removal of compression charges for CNG activity. It is not categorized as a manufacturing activity, and the 14 per cent excise duty on compression is a significant burden for both us and consumers. We urge its immediate removal," he said. He also emphasized the need to bring natural gas under GST. "Although the inclusion of natural gas under GST falls under the purview of the GST Council rather than the Budget, we hope some steps will be taken in this direction," Gupta added.