GAIL India Ltd might make a representation to the petroleum and natural gas regulatory board (PNGRB) to seek an upward revision in tariff determined by the regulator for its existing HVJ-GREP-DVPL pipeline. The PNGRB issued provisional tariff order for the pipeline on April 19 and the gas transporter has 10 days' time to file an appeal. The regulator will finalise tariff for the pipeline after hearing GAIL's view point.
The company thinks that there are certain anomalies in the method adopted by PNGRB for determination of tariff for the pipeline.
PNGRB issued tariff regulations on November 20, 2008. Before that, tariff for GAIL’s pipeline was fixed by the Tariff Commission. The tariff of Rs 28.48 per mmbtu fixed by the commission for the pipeline is subject to adjustment retrospectively from the date of issuance of the tariff regulations by PNGRB.
GAIL has been charging tariff of Rs 28.48 per mmbtu on an adhock basis for transportation of gas via the pipeline. But in its proposal submitted to PNGRB, the gas transporter sought tariff of Rs 35.39 per mmbtu on the basis of extra capital expenditure incurred by it on maintenance. However, PNGRB moderated levelised tariff to Rs 25.46 per mmbtu.
PNGRB considered only 70% of the extra capital cost claimed by GAIL. Similarly, in its tariff proposal submitted to PNGRB, GAIL had envisaged volume divisor at 90% of the design capacity of 57.30 million standard cubic meter per mmscmd.
However, the regulator considered the volume divisor at full design capacity. Similarly, PNGRB reduced inflation rate by 0.5% and fully discounted transmission losses while fixing tariff for the pipeline. The new rate will be applicable retrospectively from November 20, 2008.
Source: Finacial Express
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