New Delhi: The Petroleum and Natural Gas Regulatory Board (PNGRB) approved a 37 per cent rise in tariff from April 1 for the pipeline that transports eastern offshore KG-D6 gas of Reliance Industries (RIL) to its customers. The tariff approved is almost half of what sought by East-West Pipeline, the operator of the pipeline.
With the oil regulator’s nod, it is expected that the rise in tariff may lead to an increase in the prices of fertiliser and city gas like CNG, as they use the gas brought through the pipeline starting from Kakinada in Andhra Pradesh and running up to Bharuch in Gujarat.
The PNGRB in its final tariff order on Tuesday said, “Transporting natural gas on the East-West pipeline would cost Rs 71.66 per million British thermal unit (mmBtu) on gross calorific value (GCV) basis from April 1 as compared to Rs 52.33 per mmBtu tariff charged for April 1, 2009 to March 31, 2019.”
Earlier, the company had sought the tariff to be raised to Rs 151.84 per mmBtu with effect from April 1, 2018, nearly three times the present tariff and more than double the now permitted tariff. The pipeline primarily transports KG-D6 gas, production of which has steadily dipped from 69.43 million standard cubic metres per day achieved in March 2010 to under 3 mmscmd now.
“The tariff has been worked out based on information provided by the entity and deliberations. However, PNGRB intends to verify/audit the information provided for tariff determination and method of cost allocation, etc. by an internal team of PNGRB or by an external agency,” the order said, adding that the tariff will be subject to revision based on the audit of information and data.
Originally, EWPL had proposed a levellised tariff of Rs 55.91 per mmBtu for transporting the gas beginning April 1, 2009 but the PNGRB fixed a provisional tariff of Rs 52.53 per mmBtu. The company in October 2017 proposed a final tariff for the pipeline at Rs 78.72 effective from April 1, 2009, till the end of the economic life of the pipeline, that is up to March 31, 2034.
When the PNGRB sought clarifications, EWPL updated the tariff filing to state that Rs 52.23 per mmBtu would be the tariff till 2017 and Rs 151.84 would be charged from 2018-19 to 2035-36. However, the PNGRB order said the pipeline operator has claimed a total capex of Rs 18,307.37 crore under two heads--actual capex of Rs 16,347.96 crore and future capex of Rs 1,959.41 crore.
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