Explained - What is causing the surge in shares of GAIL, GSPL on Monday

Shares of state-run GAIL and Gujarat State Petronet Ltd. are trading with gains of up to 6% on Monday, March 24, after new developments with regards to the Petroleum and Natural Gas Board (PNGRB).

The PNGRB has received request from the industry committee, who has provided suggestions and comments on regulations with regards to tariff on natural gas.

PNGRB is looking to amend the Natural Gas Pipeline Tariff Regulations, 2008 and has sought public comments on the changes by April 11.

Brokerage firm Citi believes that fuel costs are a major change in these new draft regulations as the price of contractual LNG can now be claimed. This, according to the brokerage, will make GAIL a big beneficiary.

The recommendations also include less stringent volume assumptions once they cross the 75% threshold, which makes GSPL a big beneficiary, Citi said.

CLSA believes that the regulations can reduce the operating expenditure for both Indraprastha Gas and Mahanagar Gas. It also expects a hike in cost of gas users, including industrial customers of Gujarat Gas.

Among the 35 analysts that have coverage on GAIL, 27 of them have a "buy" rating, five of them say "hold", while three have a "sell" recommendation on the stock. Consensus estimates project a potential upside of 16% on the stock.

Shares of GAIL are off opening highs but are holding on to gains of 4.5% at ₹182.87. The stock is down 4.5% so far in 2025. Shares of GSPL are also off their opening highs, currently trading 3.3% higher at ₹298.3. Both stocks are down between 25% to 35% from their recent 52-week highs.