Gujarat anger over draft natural gas pipeline policy

Vol 7, PW 15 (08 Oct 03) People & Policy

Expect sparks to fly between Gujarat and Delhi over the draft all-India natural gas pipeline policy unveiled on 29th September by oil minister Ram Naik.

The policy will only become official after 31st October - the deadline set by Shastri Bhawan to receive objections and suggestions. Yet, well before the deadline, Gujarat has very clear views about the draft policy.

"It is a one-sided, horrible policy drafted by GAIL and meant for GAIL," says a Gujarat source. "It is a loosely drawn up document that shows no application of mind." Gujarat will certainly be sending in its objections to the draft policy, which, if not significantly modified, "will have serious implications for the emerging domestic natural gas business.

We will make a lot of noise." Conspiracy theorists within Gujarat see a sinister motive behind the timing of the draft policy announcement. Last month, India's Supreme Court finished hearing Delhi's challenge to the Gujarat Gas Act and is expected to make a judgement within the next few months.

"Is the oil ministry trying to pre-empt the Supreme Court judgement" questions a source. "This is a clear attempt to tell the judges the kind of judgement the government of India wants." Gujarat is particularly bitter that Delhi forced it to shelve the Gujarat Gas Act and wait for the Supreme Court judgement but went ahead itself to announce a national draft gas policy.

"This is very unfair." Anger in Gujarat centres on Delhi's attempts to "prop up GAIL as the only player at the national level." Such an approach will saddle the system with GAILs inadequacies, we are told. "Having only GAIL as common carrier is unworkable.

There should be competition. Otherwise the growth of the national network will be limited by GAIL's limitations." Also, "is GAIL ready to give up its marketing and producing activities and be a pure transporter" Gujarat is also upset that the draft, "ignores" Gujarat Petroleum's growing gas pipeline grid within the state.

"They (Delhi) are talking of introducing a common carrier. GSPL is already operating on a common carrier basis.

By exempting the (proposed) Reliance gas pipelines, they acknowledge that there could be players other than GAIL in the gas pipeline sector."