Presently, the country has a network of 16,981-km of pipelines, with each having a different tariff. The present tariffs policy provides for lower transportation charges in the area closer to the source of gas and this progressively increases that leads to a scenario where the users in hinterland pay extra than those on the coast.
"PNGRB proposes to hire a consultancy firm to provide assistance in analyzing different options for rationalization of natural gas pipeline tariff structure, reviewing international practices adopted on natural gas pipeline tariff design/ determination in USA, Australia, Japan, Russia, UK, and EU nations, and suggest the best-suited tariff mechanism in Indian perspective," the regulator said.
In the tender inviting bids, it said the consultant will also review current regulations and draft of new proposed regulations.
The move by PNGRB follows the government in October seeking a concept paper on rationalization of natural gas pipeline tariff structure and framing new tariff regulations.
The consultant will have to review international practices and identify the challenges present tariff regime in India poses to the growth of pipeline infrastructure.
"A matrix will be created to identify a model best suited for the Indian scenario," it said, adding the tariff structure needs to provide reasonable returns to entities building pipelines and promote the development of the gas infrastructure, while at the same time developing a pan-India gas market.
The public consultation will be done on the tariff structure proposed by the consultant, following which IT-based tools will be developed for implementation of the regulations, it added.
This exercise is in parallel to the mandate PNGRB has given to global consultancy ICF for carrying out an assessment of India's natural gas demand and the infrastructure needed to unleash the country's massive pent-up requirement, its Chairman Dinesh K Sarraf said.
Natural gas -- which has far lower emissions compared to alternate liquid fuels such as petrol and diesel used in automobiles and naphtha and coal burned in factories -- makes up for just 6.2 per cent of all forms of energy consumed in the country. This compares to a global average of 24 per cent.
One reason for the low use of environment-friendly fuel is inadequate domestic gas production and the lack of infrastructure, particularly pipelines to carry the fuel to end-users.
"We have engaged ICF to do a comprehensive assessment of demand and infrastructure needed," Sarraf said, adding the report is expected by mid-2020.
India consumed 166 million standard cubic meters per day of gas during the 2018-19 fiscal year, mostly in western and northern India as east and south were barely connected with the pipeline grid. The consumption does not reflect demand as some demand centres do not have access to gas.
ICF has been asked to study gas demand in different regions as well as the ideal locations for constructing liquefied natural gas (LNG) import terminals, he said, adding the consulting firm would also look at the pipeline network needed to connect the gas source to users.
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.