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Price of CNG & Fertiliser may go up as PNGRB hikes pipeline tariff

PW Bureau

Tariff increase would also result in a rise in the price of fertiliser and city gas like CNG that uses gas purchased through the pipeline New Delhi: The Petroleum and Natural Gas Regulatory Board (PNGRB) has given the nod to a 37 percent surge in tariff from the beginning of next month for the pipeline that transports Reliance Industries' eastern offshore KG-D6 gas to customers. A tariff increase would also result in a rise in the price of fertiliser and city gas like CNG that uses gas purchased through the pipeline starting from Kakinada in Andhra Pradesh and operating up to Bharuch in Gujarat.

Transporting natural gas to cost Rs 71.66 per mmBtu

In its final tariff order, the oil regulator in a March 12 order 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, against Rs 52.33 per mmBtu tariff charged for the April 1, 2009, to March 31, 2019, time period. The permitted tariff is about half of the tariff sought by the operator of the pipeline, East West Pipeline Ltd. It had sought the tariff to be increased to Rs 151.84 per mmBtu effectively from April 1 last year. The pipeline mainly transports KG-D6 gas, which has gradually fallen from 69.43 million standard cubic meters per day achieved in March 2010 to under 3 mmscmd.
"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,"
In a 49-page order, PNGRB went into cost calculations and other parameters to fix the tariff. "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.