PNGRB talks about new Entry-Exit gas tariff

Vol 26, PW 11 (18 May 23) People & Policy

Weeks after introducing an all-India unified single gas pipeline tariff, the PNGRB is thinking of its next move: an entry-exit based tariff system modelled on the US and the UK.

On April 1 (2023), the PNGRB replaced its outdated distance-based or "zonal" tariff model for gas transmission with a unified tariff, similar to a postage stamp system for gas where customers pay the same amount regardless of the distance the gas travels. True, it's a step in the right direction.

"But an entry-exit tariff is the next step," says a well-placed source. Under the entry-exit model, a customer books the capacity for his chosen entry and exit point and pays a separate tariff for the entry and exit.

"Under the entry-exit model, places where domestic gas or R-LNG enter the national pipeline grid would become entry points," says a PNGRB source. Among the entry points would be Dahej, the site of Petronet-LNG's 17.5m t/y LNG terminal, and Gadimoga, the landfall point for D6 gas from the Reliance-BP operated KG-DWN-98/3 block.

Exit points would be located near gas consumer facilities. Under the entry-exit system, entry-point tariffs with heavy traffic or congestion, such as Dahej, would be higher.

This would push the gas customer to less congested and cheaper entry points on the east coast. "In the long run, the congestion we see in (India's) western corridor would ease," we hear.

"And India's overall pipeline capacity would be more effectively allocated; just like the congested entry points, crowded exit points, with the higher tariff, would encourage pipeline companies to respond to the market needs and build new pipeline capacity." Some say the PNGRB introduced the unified or single tariff system as a hurried stop-gap arrangement until ready for the entry-exit regime.

But an entry-exit model would require setting up a long-talked-about Transmission System Operator (TSO) to ensure free and fair access to the grid. And before it can do that, the PNGRB needs a full-time chairperson and government approval.