Worried gas customers on HBJ confused about price

Vol 8, PW 23 (23 Feb 05) Midstream & Downstream

Customers on the route of the GAIL-owned Hazira-Bijaipur-Jagdishpur gas pipeline are a worried lot.

Contradictory statements from GAIL and the Panna, Mukta and Tapti consortium have created confusion among fertiliser and power companies that source domestic gas from the HBJ. GAIL keeps sending letters warning us to be prepared to pay the market driven price for its gas or it will curtail our supplies, an upset official from a Gujarat-based fertiliser company tells us.

GAIL has offered a revised price of $3.86 to its consumers along the HBJ, equivalent to the price of regassified LNG from Dahej. Till now we did not even know the quantum of Panna, Mukta and Tapti gas being supplied to us.

Of the 16 major consumers across the HBJ, six are fertiliser companies and four are power producers. There is so much anxiety in our sector because of this sudden salvo from GAIL, he adds.

We are being made to run around to find out the exact situation and the new price of gas. Worst affected by the imminent price increase is the fertiliser sector.

Our input costs are going to escalate and we will be forced to seek more subsidies from the government, reveals an official from state-owned KRIBHCO. Already, the Fertilisers Association of India has asked its parent ministry in Delhi to intervene.

Our ministry must take up this issue with the oil ministry so that justice is done. Equally upset is the power sector.

If GAIL and the consortium do not resolve this dispute amicably well have to accept the reality and pay more, relents one power company. Introduction of a free market price for gas in such an arbitrary manner will kill us.

GAILs biggest consumer for HBJ gas is NTPC, which has been allocated 11.21m cm/d of the 34.47m cm/d capacity of the HBJ.