PNGRB proposes unified tariff to benefit consumers away from natural gas sources

Our Bureau New Delhi | Updated on October 13, 2020

Oil gas processing plant   -  Getty Images/iStockphoto

The Petroleum and Natural Gas Regulatory Board (PNGRB) has proposed unified tariff regulations aimed at benefiting consumers located away from natural gas sources.

According to the proposal, there would be cross subsidisation of consumers located away from natural gas sources by consumers located near the gas sources. Essentially, this will benefit consumers in places like Delhi as they would not be paying significantly higher natural gas transport costs.

“The draft regulations essentially propose pooling of the existing approved pipeline tariffs of the pipelines comprising of the National Gas Grid to arrive at one single tariff to be charged across the pipelines and will be called the Unified Pipeline Tariff,” a statement from ratings agency ICRA said.

Two zones

“The regulations propose to divide the entire network into two zones, i.e. Zone-1 extending till 300 km from the point of injection of natural gas in the national gas grid from either end i.e. Western or Eastern end of the grid and the entire length thereafter comprising of Zone-2. The tariff paid by the consumers in each of the zone will be a uniform single tariff irrespective of the location,” the ICRA statement added.

“The draft regulations will remain revenue neutral for the gas pipeline operators although there will be redistribution of the transmission tariffs being paid by the consumers post the implementation of these regulations,” ICRA said.

Published on October 13, 2020

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