Oil regulator PNGRB increases tariff on petroleum product pipeline

In a big boost to companies such as Indian Oil Corporation (IOC) and Reliance Industries Ltd, the oil regulator on Friday announced an upward revision in tariff for pipelines that transport petroleum products like petrol and diesel. The Petroleum and Natural Gas Regulatory Board (PNGRB) indexed tariffs for legacy pipelines at 75 per cent of the basic railway freight plus a one-time escalation of 17 per cent and a 3.4 per cent annual escalation from the 2025-26 fiscal, according to a statement issued by the regulator. For pipelines commissioned after PNGRB in 2010 issued tariff regulations, the transportation tariff will be based on discounted cash flow (DCF) methodology with 12 per cent post-tax returns on capital employed over the economic life of the pipeline. For pipelines built after interested companies participated in a bidding process to win the rights, the tariff for the first 10 years will continue to be the one bid by the operator in the tender. From the 11th year, the ..