PNGRB weighs moving to gas entry-exit tariff model
NEW DELHI: The Petroleum and Natural Gas Regulatory Board (PNGRB) is considering a gas transmission tariff reform that would allow the tariff to be fixed separately for entry and exit point of the pipeline, a shift from the current distance-based pricing, chairman Dinesh Kumar Sarraf. PNGRB, the downstream regulator, has begun discussions on adopting the entrymodel in the Indian gas market. “We are analysing whether we should leapfrog to exit or go via unified tariff model,” Sarraf told ET. “If we are convinced that entry-exit is the way to go, we will implem March.” Under the entry-exit model, available in the European and North American markets, a customer books the capacity for his desired entry and exit point and pa separate tariff for the entry and for the exit. A unified tariff model works like a postage stamp, with the customer paying the sa gas travels. Both are different from the current system where a user is charged ba In both the proposed systems, the pipeline operator’s return on investment wouldn Under the entry-exit model, the places where the domestic gas and liquefied natur become the entry points. Exit points would be closer to consumers’ facilities. Tariff for more congested entry the customer to less congested and cheaper entry points on the eastern coast. “Th pipeline capacity,” said Sarraf. Similarly, congested exit points, with higher tariff, would induce pipeline builders to he said. The unified tariff would put to disadvantage such industries that were set up to be transportation cost, Sarraf said. With unified tariff, cost of gas for industries in Guja in eastern states would fall. Unlike in unified tariff regime, the rate in entry-exit model can be reviewed much fa consumers will be available, making decisions on tariff fixation easier, he said.