GAIL plans new distance-based gas tariff

Vol 7, PW 3 (23 Apr 03) News in Brief

GAIL is preparing a new distance-based gas pipeline tariff structure.

"The initial model is ready and we are now carrying out exercises in-house to refine it," GAIL tells PETROWATCH. "The numbers and the various assumptions are being validated with the help of an international audit firm." GAIL hopes to introduce the new tariff during this financial year for new and existing customers.

The new system will charge customers on the basis of distance traveled by pipeline unlike the present system of a uniform tariff for all customers. The result: customers near a gas supply source will pay less than customers far away.

GAIL believes the new tariffs could increase its revenue by at least Rs190cr ($39m) a year, "if customers can be successfully persuaded".

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