GAIL should focus on pipeline infrastructure, says Pradhan

Petroleum Minister Dharmendra Pradhan on Tuesday said the primary job of Gail was to lay gas infrastructure in the country, while marketing can be “done by anyone”.

The government is reportedly planning to spin off the marketing operations of Gail into a separate company. Under the Petroleum and Natural Gas Regulatory Board Act, marketing and transmission functions should not be performed by the same entity. The aim is to prevent conflict of interest as companies like GAIL are in a position to push their gas on priority.

Following the legal requirement, GAIL did not spin off its marketing business but decided to split its business and accounts into marketing and transmission verticals.

Pradhan added Gail has kicked off the Urjja Ganga programme and should emphasis on providing gas infrastructure in eastern India — connecting Uttar Pradesh, Bihar, Jharkhand, Odisha and West Bengal. “We have committed a gasbased economy to the country and are moving closer to that. The eastern India project of Gail is vital for the industrial belt, especially the upcoming steel plants in that region. We are giving viability gap for the first time for a gas infrastructure project,” he added.

Earlier, Indian Oil Corporation (IOC) and Bharat Petroleum Corporation (BPCL) were also looking to take over Gail. The plan to bifurcate the company was discussed earlier, too, during the time of the Atal Bihari Vajpayee government.

The minister added that the Rajasthan government would save at least ~400 billion from the revised viability gap funding for the Barmer refinery project by the Hindustan Petroleum Corporation (HPCL). Prime Minister Narendra Modi is set to lay the foundation stone for the project on January 16.