Equity Analysis /
Thailand

PTT PCL: Tariff cuts in the pipeline?

  • Revision of gas transmission pipeline tariffs underway

  • Scenarios for gas pipeline tariffs cuts

  • Could trigger concerns over the regulatory risk

Suppata Srisuk
Suppata Srisuk

Equity Research Analyst

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Bualuang Securities
16 September 2022

ERC is considering an adjustment to the gas pipeline tariffs for 2022-26, (possibly lower), with an announcement expected in the near future. Lower tariffs would portend a lower return on PTT’s investment, earnings, and target price. This may also trigger market concerns over future regulatory risks and prompt valuation de-rating, with investors switching to BANPU and refinery stocks.

Revision of gas transmission pipeline tariffs underway

The Energy Regulatory Commission of Thailand (ERC) is currently considering an adjustment of the demand charge (Td) of the natural gas transmission pipeline tariffs to be imposed during 2022-2026 after a public hearing was completed on Aug 10, 2022. Hence, we expect the ERC to announce the new pipeline tariffs in the near future.