The Petroleum and Natural Gas Regulatory Board (PNGRB) on Wednesday revised the levelised tariff of the Integrated Natural Gas Pipeline (INGPL) of state-run GAIL (India) to ₹58.61 per million British thermal units (mBtu) with effect from April.

“Tariff of Integrated Natural Gas Pipeline of GAIL (India) with effect from April 1, 2023, shall be ₹58.61 per mBtu on gross calorific value (GCV) basis,” PNGRB said in its order.

The total length of the network is more than 300 km. Hence, zonal apportionment of levelised tariffs is required. The apportionment of levelised tariff over all the tariff zones with calculations will be submitted by the entity for Board’s approval within 7 days from the date of issuance of this order, it added.

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INGPL is a cluster of nine pipelines including Hazira-Vijaipur-Jagdishpur-GREPDahej-Vijaipur, Dadri-Bawana-Nangal, Jagdishpur-Haldia-Bokaro-Dhamra (including Barauni Guwahati), Uran Thal Usar Sub Network and Trombay Sub Network.

The regulator determines the natural gas pipeline tariff to be charged by the entities laying, building, operating or expanding a natural gas pipeline (NGPL).

GAIL had proposed an integrated tariff of ₹68.55 per mBtu on a GCV basis for INGPL with effect from April 1, 2023 till the end of its economic life on March 31, 2049. The gas utility said the integrated tariff has been calculated with actual data up to FY22 and future projections from FY23 and onwards.

During the open house organised by PNGRB, GAIL said the integrated pipeline network comprise of nine pipelines including the Jagdishpur-Haldia and Bokaro-Dhamra Pipeline (JHBDPL) costing around ₹10,536 crore (net of capital grant of ₹4,984 crore), which will be fully commissioned in FY24 and will be a gateway for the development of gas markets in the far flung parts of the country.

Tariff regulations

Norms mandate that the first tariff review is done after the end of five consecutive years and after the end of the initial unit natural gas pipeline tariff period. The unit natural gas pipeline tariff so determined at the time of any tariff review shall apply for the period up to the next tariff review and the gap between two tariff reviews should not be less than two consecutive financial years, after the end of the financial year in which the last tariff fixation occurred.

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Transportation tariff is fixed through the Discounted Cash Flow (DCF) method using actual and projected pipeline capital expenditure (Capex) and operating expenditure (Opex) in line with provisions of the Tariff Regulations, over the entire economic life of the pipeline thus arriving at a single levelised transportation tariff.

If the length of the pipeline is more than 300 km, the recovery of the transportation tariff is apportioned across such zones of 300 km each, resulting in zonal tariff.