Oil & Gas

23 Jul 2020

India: Unified Tariff on Gas Pipelines from September

23 Jul 2020  by IANS   

In yet another reform initiative in the oil and gas sector, pipeline operators in the country may shift to a unified or pooled tariff regime for inter-connected cross-country gas pipelines from September 1.

A unified tariff may do away with levy of multiple tariffs on customers, ensuring equitable distribution of gas and uniform gas-based economic development across the country.

The current system of tariff determination leads to multiple pipeline tariffs on customers who have contracted for gas which flows from multiple pipeline operators.

According to official sources, downstream oil and gas regulator, the Petroleum and Natural Gas Regulatory Board (PNGRB) has finalised the draft regulation on unified tariff and would fix the tariff by August-end and implement it from the first day of September.

With this, one nation, one gas grid, one pricing would be implemented across the country, bringing relief to customers in far-flung areas who were being charged extra for gas transmission but raising charges for other existing customers to bring about price equalisation.

According to a report by ICICI Securities, unified tariff mechanism would boost utilisation on GAIL's Jagdishpur-Haldia-Bokaro-Dhamra pipeline (JHBDPL) by virtue of lowering of tariff under pooling of transmission prices.

When the Cabinet Committee on Economic Affairs approved the JHBDPL, GAIL had proposed unified tariff to ensure viability of this pipeline, and had estimated unified tariff on the JHBDPL and other inter-connected pipelines at Rs 57/mmbtu vs Rs 173/mmbtu, if fixed separately for the JHBDPL.

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