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Gail’s Ashutosh Karnatak: Demerger of pipeline business likely by the end of FY20

Updated : October 31, 2019 01:18 PM IST

The Gail stock saw a 6 percent rally on Wednesday as positive sentiment from the Petronet LNG numbers rubbed off. Gail will be reporting its Q2FY20 earnings next week. Ashutosh Karnatak, chairman and managing director of Gail, gave his outlook for the results and FY20 in an interview with CNBC-TV18.

Karnatak said that city gas distribution (CGD) sector is a major consumer of gas. “GAIL is also trying to tie-up with other customers which are using other fuels. So that is also gaining the momentum now,” he added.

On growth front, he said: “We have 1,200 CNG [compressed natural gas] stations at the moment and they are competitive. Therefore, by March we expect around 2,300.”

On the issue of the inclusion of natural gas in the goods and services tax (GST) regime, Karnatak said: “Gas is a commodity which will be ruling the market for the next 10-15 years. Therefore, it has to be competitive with other fuels. The tax component is not making it very competitive and GST is one of the areas where government is thinking. If it gets it then it will be competitive particularly for power sector which needs a lot of gas.”

Karnatak added that a decision on taking advantage of lower tax rates is yet to be made. He added that demerger of the pipeline business will likely happen by end of this fiscal.
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