PNGRB Endorses Changes to Natural Gas Pipeline Tariff Rules

Essential Revisions

Decrease in Unified Tariff Zones: The count of unified tariff zones is cut down from three to two.

This will make the tariff system simpler and optimize the natural gas transport network.

Nationwide Expansion of Lower Unified Tariff (Zone 1): The advantage of the reduced unified tariff in Zone 1 has now been applied throughout India. Applies to both Compressed Natural Gas (CNG) and Piped Natural Gas (PNG), encompassing residential domestic users.

Anticipated to enhance affordability and accessibility of natural gas across the country.

Obligatory Long-Term Contracts for System-Use Gas: Pipeline operators must now acquire a minimum of 75% of their system-use gas via long-term contracts (minimum duration of three years).

This will improve supply effectiveness and tariff consistency.

Establishment of Pipeline Development Reserve: Operators utilizing over 75% of their pipeline capacity are required to invest 50% of their post-tax profits into infrastructure development (Pipeline Development Reserve).

The other half of post-tax profits will be given back to consumers via adjustments in tariffs.

Conformity with “One Nation, One Grid, One Tariff”: All modifications are in accordance with the government’s strategy to establish a cohesive and available natural gas market throughout India.

Modifications were implemented following discussions with stakeholders to guarantee widespread backing and successful execution.

Regarding the Petroleum and Natural Gas Regulatory Board (PNGRB)

– It is a legal entity created under the Petroleum and Natural Gas Regulatory Board Act of 2006.

– Its main responsibility is to oversee downstream operations in India's petroleum and natural gas industry, excluding crude oil and natural gas production.

– The Board possesses authority akin to a civil court for resolving conflicts and keeps a database on industry operations.

– PNGRB has created the National Hydrocarbon Infrastructure Monitoring System (NHIMS) to monitor petroleum and natural gas transport infrastructure in real-time.