Petronet LNG Shares Drop Over 6% Amid Regulatory Concerns

Shares of Petronet LNG fell by more than 5% in early trading on January 2, 2025, following critical remarks from the Petroleum and Natural Gas Regulatory Board (PNGRB) regarding tariffs.

PNGRB Alleges Profiteering at Consumers’ Expense 

The natural gas regulator PNGRB has accused Petronet LNG of profiting at the expense of gas consumers. The company has been criticized for annually increasing tariffs for regasification at its Dahej terminal while not passing on the benefits of capacity expansion and improved utilization rates. According to PNGRB, these practices have enabled the company to profit significantly.

“Rising charges while capacities have increased, along with over 90% capacity utilization, has led to the company (Petronet LNG) being able to profit immensely at the cost of gas consumers,” PNGRB stated in a recent paper. The regulator also called for a reconsideration of the tariff structure followed by new terminals across the nation, which mirrors Dahej’s framework.

Calls to Regulate Regasification Activities 

PNGRB has proposed bringing regasification activities under its regulatory purview to ensure fair pricing and efficient utilization of LNG import infrastructure. This move, the regulator believes, will provide better oversight and protect consumer interests. Regasification is the process of converting liquefied natural gas (LNG) back into natural gas for use in various industries.

Stock Performance

On January 02, 2025, Petronet LNG share price traded 6.95% lower at ₹323.20 at 1:15 PM (IST), while the BSE benchmark Sensex jumped 1111.86 points to 79,619.27. Petronet LNG share price reached a 52-week high of ₹384.90 on August 21, 2024, and a 52-week low of ₹225.05 on January 08, 2024. As per BSE, the total traded volume for the stock stood at 3.10 lakh shares with a turnover of ₹10.14 crore.

At the current price, Petronet LNG shares are trading at a price-to-earnings (P/E) ratio of 13.30x, based on its trailing 12-month earnings per share (EPS) of ₹26.12, and a price-to-book (P/B) ratio of 2.82, according to exchange data. The stock has a beta value of 0.52, indicating its volatility in the broader market.

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