Petroleum Board’s notifies New Unified Tariff Structure

Petroleum Board’s notifies New Unified Tariff Structure

Part of: GS Prelims and GS-III – Economy

In news

• The Petroleum and Natural Gas Regulatory Board (PNGRB) has notified a new tariff structure for 14 natural gas pipelines. 
• The aim is to reduce the cost of natural gas for users further away from sources of natural gas and LNG terminals on the west coast of the country.

Key takeaways 

• Under the new unified tariff structure, buyers will be charged a fixed tariff for the transport of gas within 300 kms of a source and a fixed tariff for the transport of gas beyond 300 kms on a single pipeline network.
• This would be significantly cheaper for buyers further away from the source of gas who were earlier charged on the basis of the number of pipelines used and the distance from the source of gas.
• Therefore, a buyer using multiple pipelines would likely benefit significantly from this change.

• The changes in the tariffs will likely incentivise greater investment into gas transmission infrastructure as natural gas becomes more affordable for users further away from the west coast of the country.

Do you know? 

• The Indian government is aiming to boost the consumption of natural gas which currently accounts for 6.2% of India’s energy basket to 15% by 2030.