CGD entities across country to get gas at uniform price: Centre to Gujarat HC

Central govt issues guidelines to GAIL in compliance with Gujarat HC order

Following the Gujarat High Court directive of supplying compressed natural gas (CNG) to Gujarat at the same rate as Mumbai and Delhi, the Central government has issued guidelines to the Gas Authority of India Ltd (GAIL) to supply gas across the country at uniform rate by the end of this month. This ends the long standing demand of Gujarat government for gas at the same rate as that in Delhi and Mumbai under the administered price mechanism (APM).

The Union government on Monday filed an affidavit before bench of Chief Justice Bhaskar Bhattacharya and Justice J B Pardiwala, explaining the decision taken in compliance with the High Court order.

GAIL has been asked by the Ministry of Petroleum and Natural Gas to finalise the modalities of natural gas supply to all city gas distributors (CGDs), without discrimination between state companies and private ones, at the base rate and reduce prices by November 30.

"The proportion of supply of domestic gas vis-avis RLNG (regasified liquid natural gas), with respect to consumption in CNG (transport) and PNG (domestic) segments be kept uniform for all CGD entities. GAIL would supply domestic gas to CGD entities at uniform base price. However, the delivered price of domestic gas may vary on account of transport charges and local taxes and duties," the Central government guideline stated.

"Current allocation/supply of domestic gas for all CGD entities stands cancelled/withdrawn except in case of Tripura Natural Gas Company Limited and Assam Gas Company Limited," it further added.

"GAIL is directed to finalise the operational modality for these arrangements which should come into effect at the earliest, and not later than November 30, 2013," the Union government directed.

However it made exception in case of poll bound states where the order will become effective after completion of election process.

The Union government had been heavily criticised and often pulled up for delaying implementation of the High Court order passed in July 2012.

The HC had directed Centre to supply CNG to Gujarat for domestic and vehicular under the APM while hearing a public interest litigation (PIL) by one Dhrangadhra Prakrutik Mandal which had alleged discrimination against Gujarat in allocation of natural gas. Even the Supreme Court in September this year upheld the Gujarat High Court decision.

According to the Central government guidelines GAIL must ensured it will allot, without fail, 6.4 MMSCMD of domestic gas to supply to CGDs – for supplying CNG for transport and PNG for domestic use.

This will consist of APM supplies of 5.21 MMSCMD, and additional supply of 0.72 MMSCMD by imposing cuts on all APM and PMT customers in non-priority sectors.

If the requirement is greater, CGDs will have to source through RLNG or other alternatives.

GAIL has been asked to enter into “necessary swapping arrangements with other entities wherever required” in order to operationalise this arrangement, the ministry’s order read.

The ministry has further directed that consumption of CNG and PNG through piped network be periodically reviewed by GAIL on the basis of figures provided by the Petroleum Planning and Analysis Cell (PPAC).