New Tariff Boost for Petroleum Pipelines: PNGRB Revises Rates for Indian Oil and Reliance

The Petroleum and Natural Gas Regulatory Board (PNGRB) has announced upward revisions in tariffs for pipelines transporting petroleum products like petrol and diesel, benefiting companies like Indian Oil Corporation (IOC) and Reliance Industries Ltd. The new tariffs, effective from August 1, 2024, aim to promote financial stability and growth in pipeline infrastructure.

In a significant move for companies such as Indian Oil Corporation (IOC) and Reliance Industries Ltd, the oil regulator, PNGRB, has announced an upward revision in tariffs for pipelines transporting petroleum products. The new tariffs, effective from August 1, aim to strengthen financial stability and infrastructure growth.

The revisions include a 75% indexing of basic railway freight for legacy pipelines, a one-time 17% escalation, and a 3.4% annual increase starting in 2025-26. For new pipelines, tariffs will be based on a discounted cash flow methodology with 12% post-tax returns over the pipeline's economic life.

These adjustments are expected to provide a more reliable and economically efficient alternative to road transportation, support infrastructure expansion, and contribute to a greener, safer future for petroleum transport in India.