PNGRB Greenlights Changes to Natural Gas Pipeline Tariff Rules

Decrease in Unified Tariff Zones: The total unified tariff zones is decreased from three to two.

This will clarify the tariff framework and enhance the natural gas transport system.

Nationwide Expansion of Reduced Unified Tariff (Zone 1): The advantage of the reduced unified tariff in Zone 1 is now available throughout India. Applies to both Piped Natural Gas (PNG) and Compressed Natural Gas (CNG), encompassing residential household users.

Aimed at enhancing the affordability and accessibility of natural gas across the country.

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

This will improve supply effectiveness and tariff consistency.

Establishment of Pipeline Development Reserve: Operators exceeding 75% pipeline usage are required to designate 50% of their after-tax profits for infrastructure development (Pipeline Development Reserve).

The other half of the post-tax profits will be passed back to consumers via changes in tariffs.

Consistency with “One Nation, One Grid, One Tariff”: All modifications are in accordance with the government's objective to establish a cohesive and reachable natural gas market throughout India.

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

Concerning the Petroleum and Natural Gas Regulatory Board (PNGRB)

– It is a legal entity formed 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, not including the extraction of crude oil and natural gas.

– The Board possesses authorities akin to a civil court for resolving conflicts and manages 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.