India Reforming Gas Pipeline Tariff: Minister

India is working on rationalising its gas pipeline tariff structure to make gas more affordable across the country and attract investment into the gas infrastructure business, the country’s petroleum and natural gas minister Dharmendra Pradhan said on July 1 during a webinar.

“The present zonal tariff structure for the gas pipelines results in additive tariffs for the usage of multiple pipelines to transport natural gas from the distant gas supply sources. It causes a wide disparity in pipeline tariffs particularly for the buyers located distant from the gas sources and thus it hinders the development of new gas markets/demand centres in far-flung and remote areas,” he said during the webinar, organised by the International Energy Agency and his ministry.

Pradhan said to create a level playing field among gas consumers located in remote areas, the existing zonal tariff structure is currently being reviewed to make it rational and competitive. The new tariff structure would facilitate creating a single gas market by attracting investment to a complete gas grid as well as ensuring equitable access to natural gas across the country.

“Gas based industries would benefit with new tariff structure which would improve gas affordability across the country. Further, a simplified tariff structure would also encourage gas industries to utilise the opportunity of procuring their gas requirement through gas trade exchange platforms based on a market mechanism,” the minister said.

A level playing field among industries would help minimise their input costs and improve competitiveness in the global production chain, he said. Apart from industries, a new rationalised tariff structure would also spur the development of city gas projects.

The south Asian nation is looking to boost the use of gas, aiming to raise the fuel's share in its overall energy mix to 15% by 2030 from 6% today. The country’s first online delivery-based gas trading platform was launched last month.