GAS ALLOCATION POLICY TWEAKED; IMPORTED LNG TOO FOR CITY GAS

New Delhi, May 11: The oil ministry has modified its gas allocation policy for the city gas sector, allowing state-owned Gail (India) Ltd to import gas and buy from newer domestic fields to meet growing demand from households and the transport sector. Gail will pool or average out the price of imported as well as newer field gas with the lowerpriced regulated field gas to supply to city gas entities for sale as CNG to automobiles and piped natural gas to households, a ministry order said.

Till now, city gas entities were allocated natural gas from older fields, called the regulated or APM gas. To promote the sector, the Cabinet had in 2014-15 made city gas a 'no-cut' sector, which meant all demand of the sector would be met from domestic fields.

But as the demand grew and APM gas production remained stagnant, the ministry modified the allocation policy.

As per the ministry's May 6 order, gas allocation to city gas will be made on a three-month basis as against the previous policy of six monthly allocations.

"Revision of allocation for supply of pooled natural gas to city gas distribution (CGD) entities for CNG and piped natural gas (PNG) segments will be done on a quarterly basis for better representation of consumption," it said.

To meet the growing demand of the sector, Gail will supply pooled natural gas 2.5 per cent over and above the 100 per cent requirement of CNG and PNG for household segment of each city in quarterly allocation.

To meet the shortfall in domestic availability, Gail will source gas from the difficult fields which are priced at a higher rate than APM gas for mixing with available regulated gas, the order.

"For any further requirement, Gail will also source long term LNG failing which spot LNG may be sourced for mixing with available APM gas," the order said.