In a bid to raise the share of natural gas in the energy basket, India will soon have a new tariff policy that will help bring down the cost of transporting the environment friendly fuel.
Also, oil regulator PNGRB is working on a new regime for authorisation of gas pipelines that will make it more investor friendly.
Speaking at the launch of nation's maiden online gas trading platform by IGX, both Oil Minister Dharmendra Pradhan and regulator PNGRB Chairman Dinesh Kumar Sarraf spoke of a new pipeline tariff policy that will replace existing practice of seven different pipeline operators charging separate rates and customers away from gas source paying more than those nearer to source.
"PNGRB is also working on rationalisation of tariffs to make natural gas affordable in every part of the country. It will facilitate development of gas market in eastern and north eastern part of the country," Pradhan said.
Petroleum and Natural Gas Regulatory Board (PNGRB) Chairman Sarraf hinted of single rate across pipelines so as to make the price of fuel uniform for customers across the country.
A draft regulation for the new tariff policy will be issued in next few weeks and after stakeholder inputs, the policy will be finalised, he said.
Presently, customers near the gas source, such as those in Gujarat - where most of imported gas as well as domestic production from western offshore fields lands - pay less than those in other parts. The transportation tariff goes up as the gas travels into the hinterland, making the fuel up to USD 2-3 per million British thermal unit more than those near source.
Sarraf said the regulator was also working on a new regime for authorisation of pipelines as well as open up city gas distribution networks for third party access after the end of exclusivity period.
Proposal before PNGRB to have a single rate across all pipelines. But prior to that suggestions have been made to split state-owned GAIL to resolve the conflict of principal transporter also being the biggest gas marketer.
Pradhan said GAIL has come up with a proposal to have pipeline and gas marketing business in separate divisions. "There will be an infrastructure company for pipelines."
The share of natural gas in India's energy basket is 6.2 per cent and the government has set a target to raise this to 15 per cent by 2030 to replace some of the polluting liquid fuel and coal with the environment friendly fuel.
Gas transportation through pipelines is the most economical means to transport in the country. At present, about 16,788 km long gas pipeline network is under operation in the country and around 14,500 km pipeline is approved/under construction.
"Efforts are underway to complete the Gas Grid in a time-bound manner. PNGRB is in a process of bidding out the pipelines for missing sections to complete the national Gas Grid," he said.
The minister said since 2014, the government has given a thrust to expand the gas infrastructure coverage for increasing the share of natural gas in our primary energy mix.
"In this direction, we are also progressively moving towards creation of a free gas market in the country," he said adding the country's s first online gas trading platform will help discover price of the fuel.
This platform is going to support the government's vision of a free gas market in the country, he said.
"The gas trading platform will play a vital role to discover our own price benchmark for gas, address demand supply gaps, accelerate investments in the value chain. The transparency, reliability, flexibility, and competitiveness of our gas markets will contribute in reviving India's industrial and economic growth," Pradhan said.
With evolution of gas markets, future policies and regulatory framework is also going to be more market-friendly and to accommodate the market needs, he said.
"We are a price sensitive market in India and the Exchange will play in a key role in discovering gas prices," he said.