Question : Price-Tariff Formula for LNG

(a) the details of present price/tariff fixation formula being followed by the Petroleum and Natural Gas Regulatory Board (PNGRB) and Gujarat Gas Ltd. for Liquefied Natural Gas (LNG) from the terminal to the end user along with the date on which the same came into force;
(b) the details of price/tariff fixation formula followed in the past for the purpose;
(c) the details of criteria and tenure laid down/set for revision of the said tariff formula;
(d) whether the Government proposes to consider deregulating the LNG distribution sector from terminal to end users in Gujarat allowing other Public Sector Undertakings to make it more competitive on the lines of sectors like telecom and electricity for the benefit of the end users; and
(e) if so, the details thereof and if not, the reasons therefor?

MINISTER OF PETROLEUM AND NATURAL GAS (SHRI DHARMENDRA PRADHAN)
(a) to (e) : A statement is laid on the Table of the House.
STATEMENT REFERRED IN REPLY TO PARTS (a) to (e) OF THE LOK SABHA STARRED QUESTION NO. *62 ASKED BY SHRI KUNDARIYA MOHAN BHAI KALYANJI BHAI TO BE ANSWERED ON JULY 23, 2018
(a) Liquefied Natural Gas (LNG) is being imported under open general license on the terms and conditions mutually agreed upon between the buyers and sellers and it is being traded in the country on market based mechanism. As provided under Section 22 of Petroleum and Natural Gas Regulatory Board (PNGRB) Act, 2006, through notified regulations dated 20.11.2008, PNGRB is fixing transportation tariff for transportation of re-gasified LNG through transmission trunk pipelines from terminal to end users connected to such trunk pipelines. Gujarat Gas Ltd is a local distribution entity authorized by PNGRB to lay, build, operate or expand City or local natural gas distribution networks in various Geographical Areas in various states including Gujarat. The provisions of the PNGRB Act, 2006 provides for fixation of the Maximum Retail Price (MRP) for the sale of natural gas to its retail consumers.
(b) Prior to PNGRB, Tariff commission/committees constituted by Ministry were determining tariff for trunk pipeline and few entities were fixing negotiated pipeline tariffs. PNGRB was formed in 2007, and also fixes the transportation tariff for trunk natural gas pipelines.
(c ) The details of criteria and tenure laid down/set for revision of the set transmission pipeline tariff formula as per Clause 9 of Schedule A of Petroleum and Natural Gas Regulatory Board (Determination of Natural Gas Pipeline Tariff) Regulations, 2008, dated 20.11.2008 is at Annexure-I.
(d) & (e) At present, there is no pipeline in the country to transport LNG in liquid form from the LNG terminal to end user directly. The LNG after regasification is being transported in the gaseous state through the trunk gas pipelines from terminals to end consumers of such pipeline. PNGRB has notified the relevant regulations to transport the natural gas which includes re-gasified LNG through trunk gas pipelines on common carrier or contract carrier principle at the regulated tariff fixed by PNGRB. Further, the provisions of the PNGRB Act also provide to transport the natural gas including re-gasified LNG through city gas distribution pipelines on common carrier or contract carrier principle after the end of exclusivity period.