House­holds may have to pay mar­ket rates for piped gas

Hindustan Times ST (Mumbai) - - HTNATION - Ra­jeev Jayaswal ra­[email protected]

NEW DELHI: Over 4.77 mil­lion house­holds and 3.25 mil­lion au­to­mo­bile own­ers may have to pay mar­ket rates for piped nat­u­ral gas (PNG) and com­pressed nat­u­ral gas [CNG], re­spec­tively.

A high-pow­ered com­mit­tee has rec­om­mended with­drawal of gas sup­ply at con­ces­sional rates to CNG users and pro­posed di­rect sub­sidy to only do­mes­tic kitchens. There would be about 40-50% jump in PNG and CNG rates de­pend­ing on volatil­ity in the in­ter­na­tional bench­mark rates if the rec­om­men­da­tion is im­ple­mented, ex­ec­u­tives with sta­te­owned nat­u­ral gas pro­cess­ing and dis­tri­bu­tion com­pany GAIL In­dia and In­draprastha Gas Ltd (IGL) said re­quest­ing anonymity. There was no re­sponse to queries sent to the min­istry of petroleum, GAIL In­dia and IGL.

IGL is cur­rently sup­ply­ing PNG to do­mes­tic kitchens at ~ 29.80 per stan­dard cu­bic me­ter (SCM), in­clud­ing tax in Delhi. PNG costs large in­dus­trial con­sumers around ~43.6 per SCM. IGL sells CNG at ~ 44.70 per kg in the cap­i­tal. The pro­pos­als are part of a re­cent re­port on en­ergy se­cu­rity made by a com­mit­tee chaired by NITI Aayog vicechair­man Ra­jiv Ku­mar. The re­port of the com­mit­tee is un­der “ac­tive con­sid­er­a­tion”, two of­fi­cials in the petroleum min­istry said on con­di­tion of anonymity.

The com­mit­tee that sub­mit­ted its re­port last month to the oil min­istry has cabi­net sec­re­tary P K Sinha, oil sec­re­tary M M Kutty, depart­ment of eco­nomic af­fairs sec­re­tary Sub­hash Chan­dra Garg, Oil and Nat­u­ral Gas Cor­po­ra­tion chair­man Shashi Shankar and NITI Aayog CEO Amitabh Kant as mem­bers.

“The CGD [city gas dis­tri­bu­tion] sec­tor is avail­ing sub­sidised gas com­pris­ing PNG for the house­hold sec­tor and CNG for the trans­port sec­tor. The CNG sec­tor need not be sub­sidised as even the mar­ket price-based gas would be cheaper com­pared to diesel or other fuel sub­sti­tutes,” the com­mit­tee said in a re­port. HT has seen a copy of the re­port.

The re­port added, “The sub­sidy to PNG can be given in the form of DBT [Di­rect Ben­e­fit Trans­fer] as in the case of LPG.”

The Di­rect Ben­e­fit Trans­fer of LPG, which is also known as PAHAL or Pratyaksh Hanstantrit Labh, was launched on Novem­ber 15, 2014. Un­der the scheme, LPG cylin­ders are sold as per the mar­ket rate and the sub­sidy on the fuel is trans­ferred to the el­i­gi­ble con­sumers di­rectly into their Aad­haar-linked bank ac­counts. Later, con­sumers earn­ing over ~10 lakh per an­num were ex­cluded from the sub­sidy.

Although there is no overt sub­sidy in PNG and CNG, the govern­ment has ac­corded the top pri­or­ity for PNG and CNG con­sumers.

Un­der the pol­icy, the CGD sec­tor has first right over do­mes­ti­cally-pro­duced gas. Price of do­mes­ti­cally-pro­duced nat­u­ral gas is reg­u­lated by the govern­ment ex­cept for gas pro­duced from Panna-mukta-tapti fields, which is sig­nif­i­cantly lower than the price of im­ported gas.cur­rently, do­mes­ti­cally-pro­duced gas is sold at $3.36 (~239.15) per unit, about 65% cheaper than the landed cost of im­ported gas, which is around $5.50 (~391.47) per unit. Re­ply­ing to a query on sub­sidy to PNG con­sumers on Au­gust 1, 2018, petroleum min­is­ter Dhar­men­dra Prad­han had told Lok Sabha, “Do­mes­tic gas, which is cheaper than im­ported gas, has been al­lo­cated to meet the en­tire re­quire­ment of PNG [do­mes­tic] and Com­pressed Nat­u­ral Gas... [Trans­port] seg­ments of City Gas Dis­tri­bu­tion... sec­tor and it has been kept un­der no cut cat­e­gory.”

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