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GAIL (India) Ltd may end up losing Rs 500 crore following the order on lower tariffs by the Petroleum and Natural Gas Regulatory Board (PNGRB) for its Krishna Godavari Basin network which comprises four regional pipelines.
The regulator has set a uniform tariff of Rs 5.56/mmBtu with retrospective effect (from November 20, 2008).
GAIL has been charging Rs 11.44/mmBtu for Tatipaka-Kakinada-Kovuur network and Rs 28.38/mmBtu for Tatipaka-Kondapalli plus Lingala network. This tariff was fixed before the PNGRB came into existence.
The order, dated May 10, also impacted GAIL’s share price, which fell by 2.94 per cent on the BSE closing at Rs 332.15 on Monday.
GAIL had submitted to PNGRB that the tariffs for the Tatipaka-Kakinada-Kovuur network and Tatipaka-Kondapalli pipeline network were determined by the Tariff Commission before the regulator came into existence. For the Lingala and Gopavaram isolated fields, a fixed tariff was being charged,
According to the order, “The provisional initial unit natural gas pipeline tariff on levelised basis determined by the Board for the KG basin natural gas pipeline network of GAIL as a single integrates network shall be Rs 5.56 per mmBtu on gross calorific value basis ...”
According to GAIL officials, the company is studying the order and will decide its next course of action shortly. One thing was, however, clear – that the order would impact the revenues from the said network, company sources said.
In fact, the network was to carry 16 mmscmd of gas, but was getting only 6 mmscmd as availability was an issue. Therefore, if the order is based on the assumption of gas supply of 16 mmscmd, it would not be fair to the transmission company, a source said.
richa.mishra@thehindu.co.in
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