Comments
In a move that would make piped cooking gas cheaper, GAIL (India) has pitched for a uniform tariff for natural gas.
If the proposal finds acceptance with the government it would average out the price of gas in States across the government’s ambitious ‘Urja Ganga’ gas grid.
This would mean that the landed price of gas on this network for States such as Bihar, Jharkhand or Odisha will be the same across the State.
At present, prices are discriminatory for end users situated far from the source of gas.
A senior official told BusinessLine that the intent is to help reduce the landed price of gas at such locations to help boost demand.
The Ministry of Petroleum and Natural Gas is currently deliberating on GAIL’s proposal.
On how will this work, the official explained, “GAIL will charge marginally higher from consumers closer to the source of gas to average out the price across the network.
This will bring parity to the cost of gas across City Gas Distribution Networks in a State as there will be a fixed price at which natural gas will be supplied to them.”
The proposal is similar to power transmission costs and is called the Postage Stamp Tariff method.
According to analysts, this will be revenue neutral for GAIL as the operator will be getting a levelised tariff throughout the length of the network.
But the upside is a better reception from consumers who will not be facing exponential transport costs on any end of the pipeline.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.