New Delhi: GAIL, the country’s largest gas transporter, has challenged the Petroleum and Natural Gas Regulatory Board’s (PNGRB) latest tariff order, citing “apparent mistakes” by the regulator, its finance chief said.
The PNGRB recently approved a tariff of ₹65.69 per mmBtu for GAIL’s integrated pipeline network, a 12 per cent increase over last year’s ₹58.60 but well below the ₹78 per mmBtu sought by the company.
GAIL has appealed the order, arguing that the regulator wrongly excluded future capital and operational expenditure while determining the tariff, Rakesh Jain, director (finance), told ET. While PNGRB accepted higher gas transmission volumes, it did not allow a proportionate increase in transmission losses, which weighed on the tariff, he said.
Jain said the regulator erred in how it treated gains from pipeline capacity utilisation above 75 per cent. Under the rules, such gains are to be shared equally between the operator and customers, but the PNGRB passed the entire benefit to customers, he said. “These, in our view, are apparent mistakes. So, we have filed an appeal with the PNGRB,” Jain said.
A lower tariff approval could ultimately hurt consumers, he said. “It looks like a loss in the short term (for us), but we will get the money eventually. The customer will then have to pay much more.”
GAIL is entitled to a 12 per cent post-tax return on capital employed through tariffs, Jain said.
