Indian Oil Corporation (IOC) has decided to make an investment of around Rs 40 billion in pipelines in the coming couple of fiscals with the aim to trim the costs it include in transporting products by rail and road.

The sources informed that this pipeline proposal is in addition to the projects worth Rs 40 billion already under execution.

Depending on the throughput, pipeline transportation costs 14-70% of the railway freight. The sources further informed that enhancing the pipeline network will contribute significantly to IOC's net profit.

While a part of the total investment planned may be utilized in de-bottlenecking the existing Salaya-Mathura crude pipeline (Rs 18 billion), the lifeline of the three refineries (Mathura, Panipat and Koyali) in northern and western India, and accommodate Cairn crude, the company is considering major investments in creating an LPG pipeline network across the country.

The company has already opened a 275-km LPG pipeline from Panipat to Jalandhar in Punjab, now considering criss-crossing the country with LPG pipelines.

 Shares of the company gained Rs 19.7, or 3.11%, to settle at Rs 653.25. The total volume of shares traded was 114,380.00 at the BSE (Friday).