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India moving towards gas pricing freedom: Pradhan

Our Bureau New Delhi | Updated on July 01, 2020 Published on July 01, 2020

Gas pipeline tariff to be simplified, says Minister for Petroleum and Natural Gas

The government is progressively moving towards a marketing and pricing freedom regime in the country, said Minister for Petroleum and Natural Gas, Dharmendra Pradhan.

He was speaking at a joint webinar on ‘Building a natural gas based economy in India amidst a changing global gas market landscape’. It was organised by the Centre and the International Energy Agency.

Rational, competitive structure

Pradhan said that with a view to further facilitate a conducive business environment for competitive gas markets, efforts are underway to rationalise gas pipeline tariff structure for improving the affordability of gas across the country and attracting investments into the gas infrastructure.

He said that to create a level-playing field among gas consumers located in far/remote areas, the existing zonal tariff structure is being reviewed to make it rational and competitive.

“The new tariff structure would facilitate in creating a single gas market by attracting investment to complete the Gas Grid as well as ensuring equitable access to natural gas across the country. Gas-based industries would benefit with a new tariff structure, which would improve gas affordability across the country,” an official statement said.

“Further, a simplified tariff structure would also encourage gas industries to utilise the opportunity of procuring their gas requirement through the Gas Trade Exchange(s) platform based on market mechanism. A level-playing field among industries would promote in minimising their input cost and improve competitiveness in the global production chain,” the statement added.

The present zonal tariff structure for the gas pipelines results into additive tariffs for usage of multiple pipelines to transport natural gas from distant gas supply sources. It causes wide disparity in pipeline tariffs, particularly for buyers located distant from the gas sources, and thus it hinders the development of new gas markets/demand centres in far-flung and remote areas, the statement said.

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Published on July 01, 2020
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