The Northern India Glass Manufacturers’ Association (NIGMA) has knocked at the Prime Minister’s door alleging that GAIL (India) is selling natural gas to units at Taj Trapezium Zone (TTZ) at cheaper rates.

While GAIL said that it was following the Supreme Court orders, the Association has alleged that the public sector gas transmission and marketing major was discriminating by indulging in “cheap and unregulated” supply of natural gas to sectors that do not qualify for getting the fuel at low cost.

₹3,000-crore revenue loss

In a letter to the Prime Minister’s Office, the Association has said that this (move by GAIL) had led to not only revenue loss of over ₹3,000 crore to the Government, but had also led to closure of about 15 glass-based units outside the zone, besides degrading eco-sensitive monuments, such as the Taj Mahal.

TTZ, an area of 10,400 sq km around the Taj Mahal, covers five districts in the Agra region and comprises over 40 protected monuments, including the Taj Mahal, Agra Fort and Fatehpur Sikri.

Claiming local politics at play, sources in GAIL said the units that were making the claim were outside the TTZ. They further argued that these industries had become used to subsidised gas rates and, therefore, were upset because of fuel costs going up due to uniform gas price – a mix of controlled price (administered pricing mechanism) and imported gas (re-gasified liquefied natural gas).

GAIL in 2012 had got the Ministry for Petroleum & Natural Gas nod for supply to industries in the TTZ based on uniform price mechanism to meet the extra demand. The customers in TTZ were informed that with effect from July 16, 2012, uniform price of gas shall be applicable to all industrial customers in Agra and Firozabad region, and fresh gas supply contracts (GSC) were to be signed.

At this stage, three writ petitions were filed in the High Court of Allahabad, challenging the implementation of uniform price.

Subsequently, the court dismissed the petitions and directed the petitioners to sign fresh contracts.

The petitioners filed an appeal in the Supreme Court. However, the apex court also dismissed the petition and advised signing of new contracts.

Subsequently, GSCs were signed and gas was now being supplied to the industries, after they get all the statutory permissions such as approval from District Industries Centre (DIC) and the UP Pollution Control Board.

Allegations

But the association counters this with allegations that despite a Supreme Court order prohibiting existing units in TTZ from diversifying or expanding their capacities, some new units, with much bigger capacities, had come up in the zone and continued to get cheap natural gas. KK Sharma, President, NIGMA, said the Petroleum Ministry had clarified in July 2005 that subsidised natural gas was meant only for priority sectors, such as power and fertiliser, consumers covered under the court orders as well as some small users.

According to NIGMA, in 2013-14, units in the TTZ area were paying ₹15 per standard cubic metre (SCM) compared with ₹52/SCM being paid by normal consumers.

Urging the Petroleum Ministry to ensure that supply of cheap natural gas is stopped in TTZ, the association called for “one rate, one industry” to prevent more glass bottle units from closing down.

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