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GAIL Plans Rs12,000 Crore Capex for FY27 Amid Easing Gas Prices

GAIL (India) Ltd has announced a Rs12,000 crore capital expenditure plan for FY 2026-27, anticipating a decline in global natural gas prices. This reduction is expected to support GAIL’s expansion and cost control efforts, especially as Henry Hub prices stabilize. The company also forecasts crude oil prices to stay within $60–$70 per barrel, barring any major geopolitical shocks. However, GAIL expressed concerns over low prices of alternative fuels like naphtha, which have impacted gas demand, especially during the summer, as gas couldn’t effectively compete in pricing.

The capex allocation includes Rs4,000 crore for pipelines, Rs2,500 crore for petrochemicals, Rs500 crore for exploration and production, Rs200 crore for city gas distribution, Rs1,400 crore for operational needs, and Rs850 crore for equity contributions. Additionally, Rs2,000 crore is reserved for achieving net-zero targets. Major ongoing pipeline projects include Mumbai-Nagpur-Jharsuguda, Jagdishpur-Haldia-Bokaro-Dhamra, and Kochi-Koottanad-Bangalore-Mangalore, with new authorization for the Gurdaspur-Jammu pipeline.

Financially, GAIL reported a 25% drop in Q1 FY26 net profit to Rs2,382 crore, while revenues rose marginally to Rs35,429 crore. Marketing margins are expected to stay in the Rs4,000–Rs4,500 crore range, though gas transmission volumes were revised down due to weaker demand.