GAIL (India) Ltd a state-run gas utility business is being considered to be split by the government by selling its pipeline business to the suitable investors. GAIL is the biggest natural gas trading and marketing firm or India which is the owner of more than 16,234 km pipeline which makes it about two-third of total India’s pipeline network.

This split is considered after many complain by the users about the 11,551 km pipeline’s limited access to transport their fuel. The main reason for such issue is said due to the two business front owned by GAIL. That is why the government is planning to separate the business to get rid of any issues.

Earlier it was said that the marketing business of the gas pipeline will be sold to another state-owned business. But now that the split is being considered then a major stake in the business will be sold.

As you might already know that GAIL has been in contract with the countries like the United States of America to import the Liquified Natural Gas (LNG). But it might not be easy for anyone to deal with as the gas is available at a much cheaper price in the local market. As the majority of the stakes are beings sold the pipeline business can be made into a separate company.

By selling the stake in the business the government will be able to recover about Rs 1,05,000 crore. GAIL sells more than 60 percent of natural gas in India with owning more than 11,500 km of gas pipeline in the country.

Due to the government being unhappy with the performance of GAIL in expanding its pipeline business the sale is being considered. The government owns about 54.89 percent of stake in GAIL and has a market capitalization of about Rs 65,600 crore.

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