One of the key changes was the reduction of tariff zones from three to two which makes the tariff structure simple and lower input costs for such firms.
Domestic city gas distribution (CGD) companies are set to benefit from a series of regulatory reforms in terms of reducing costs and improving efficiency as new tariff order is expected to be issued next month, following the release of revised pipeline tariff regulations two days ago.
According to officials, the revised regulations are likely to reduce the cost burden on CGD companies. It means that consumers may also see a reduction in gas prices—potentially up to 50 per cent in some regions.
The changes stem from amendments made in 2022 and subsequent reforms were directed towards CGD operators and end-users.
One of the key changes was the reduction of tariff zones from three to two which makes the tariff structure simple and lower input costs for such firms.
The new framework allows CGD companies to propose their own tariff structures and offers them the flexibility to source gas from either domestic or international markets. A separate fund will be created to ensure that 50 per cent of the revenue generated is invested in the development of pipeline infrastructure.
The Petroleum and Natural Gas Regulatory Board (PNGRB) is also set to release a specific tariff order for GAIL India shortly.
Moreover, a new CGD policy has been introduced and adopted by ten states. The bidding process for CGD licenses will also be modified, with operators being given greater control and responsibility.
The reforms aim to expand the gas pipeline network across the country and promote the use of clean energy.
There is also an ongoing discussion regarding the creation of a gas product exchange.
Consultations on this initiative are expected to begin soon, although its full implementation may take up to two years.