Green fuel projects likely to get top priority for gas

Green fuel projects likely to get top priority for gas

NEW DELHI: The oil ministry proposes to change the pecking order for earmarking domestic natural gas, putting green fuel projects on top with a view to easing kitchen subsidy burden and cleaning up the air in cities.

The basic thinking behind the move is that it would take very little additional gas to expand green fuel projects such as CNG distribution networks and piped natural gas in non-metro and smaller cities. Raising the number of households connected to piped gas supplies would bring down the number of LPG users and lessen the cash-strapped government’s subsidy burden.

Expansion of CNG service would help cities breathe easy by reducing vehicular emmissions and offering cheaper fuel option. In the new scheme of things proposed by the ministry, next in line for allocation would be plants providing inputs to strategic sectors of atomic energy and space research. Again, these require small quantities.

At present, urea manufacturing plants have the first right over domestic gas, followed by LPG plants and power stations. CNG and PNG services occupy fourth position. After this, a small quantity of up to 1.5 million standard cubic meters per day of gas will be allocated for extraction of higher hydrocarbons like PG and petrochemicals. Fourth on the list would be gas-based urea plants, followed by power plants complying the condition that the entire electricity produced from allocated gas shall only be sold at regulated tariff, they said.

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