GSPC fights GAIL over Rs19.83/mmbtu tariff

Vol 15, PW 7 (06 Oct 11) People & Policy

Labanyendu Mansingh and his two colleagues on the Petroleum & Natural Gas Regulatory Board may find themselves on opposite sides once again.

This time it is over a dispute between GSPC and GAIL relating to gas transportation tariffs. Mansingh is due to retire as chairman next week, on October 11, and board sources say it is unclear if he’ll get the support of colleagues Sudha Mahalingam and YPC Dangay.

In dispute is the transportation tariff GAIL charges GSPC to evacuate R-LNG from the Dahej terminal along a 500-metre stretch of the HBJ pipeline which interconnects with GSPC’s own gas grid, controlled by GSPC subsidiary Gujarat State Petronet. GAIL more than doubled the transmission charge to Rs19.83/mmbtu in June 2010 following a decision by the PNGRB to divide gas transmission pipelines into 300-km zones each for the purpose of setting transmission tariffs.

No allowance was made for interconnectivity charges along short 500-metre pipeline stretches of the sort used by GSPC to connect to its own grid. Before June 2010 GSPC paid GAIL just Rs8.74/mmbtu in line with a Tariff Commission edict on May 18, 2006.

And in its challenge GSPC insists it wants to return to the Rs8.74 tariff, and will pay no more. Worse for GSPC is that it has in place a pipeline to evacuate R-LNG from Dahej but is prevented by law from using it.

“GAIL has sole transportation rights for Dahej R-LNG,” we hear, “and won’t let GSPC use its own pipeline inside the Dahej terminal.” In its petition GSPC claims GAIL’s action impacts 1495 industrial and 265,000 domestic, commercial and CNG consumers as it is forced to pass on GAIL’s charges plus its own pipeline tariff.

“The impact of GAIL’s charges,” writes GSPC, “results in an additional R-LNG price of Rs21.85/mmbtu to GSPC consumers.” The PNGRB last reviewed this case in August.

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