GAIL (India) Ltd said on Wednesday that the cut in gas supply to small industries in South Gujarat is due to the change in Government guidelines, which prioritises city gas distribution.
“The recent changes in Administered Price Mechanism (APM) gas allocation are pursuant to the Government guidelines of February 3 and August 20, 2014. Government has accorded top priority to city gas distribution entities for use of natural gas in domestic households (PNG) and transport sector (CNG),” GAIL said in a statement.
The company’s statement was in a reaction to allegations from small industrial customers in South Gujarat which claimed that GAIL has cut supplies on a selective and arbitrary basis.
“Based on the Ministry of Petroleum and Natural Gas’ directive, supplies of APM gas to non-priority sector has been cut by around 3 to 4 mmscmd, while the cut for South Gujarat’s industrial customers is around 0.3 to 0.4 mmscmd,” GAIL said.
The company added that the reallocation of natural gas from South Gujarat’s industrial customers would enable cooking gas supply to more than 6 lakh households in the region. Currently, more than 8 mmscmd of natural gas is supplied to CNG and PNG sector, of which 2 mmscmd is supplied to city gas distribution entities in Gujarat.
GAIL also said that to protect the interests of small customers – those having allocation of gas up to 50,000 scmd have been kept out of the ambit of the pro-rata cut in gas supplies to non-priority sectors.
“GAIL’s own petrochemical plant is undergoing a cut of 88 per cent as against its allocation,” it said.