Pneumatic conveying is widely used in industries handling large amount of granular materials to transport the solid particles; however, the process is energy intensive as an instability of flow sets in the transportation line even in the dilute regime, causing large fluctuations in the line pressure drop, the reason of which is not clearly understood. Here, we investigate, both by experiments and by using numerical simulations, the instability transition regimes and identify the reasons of the fluctuations observed in the line pressure drop in a horizontal pneumatic transport system operating at near-saltation conditions. It is observed that the increase in the pressure drop (immediately after the saltation) is accompanied by the formation of distinct dunes. It is also observed that the line pressure drop depends on the axial location of the dune and shows large fluctuations in the regime where the dunes are unstable. Results obtained from the numerical simulations suggest that the increase in the line pressure drop in the presence of dunes is essentially due to the shear stresses at the dune surface which are larger than that for the flows in clean pipe.