Question : Hike in Input Costs of Domestic Gas

(a) the estimated date from which the Government plans to end power sector’s priority access to cheap domestic gas and set up gas trading platform;
(b) whether this will result in an increase in input costs for power sector;
(c) whether this could result in increased pending payments to the gas suppliers from power generators, if so, whether the power sector is financially stable to manage a hike in input costs;
(d) whether the Ministry did not agree to the recommendations of NITI Aayog and DIPAM to sell GAIL’s pipeline unit to a third party and if so, the reasons therefor; and
(e) the final decision on the pipeline business of the GAIL and the reasons therefor?

MINISTER OF PETROLEUM AND NATURAL GAS
(SHRI DHARMENDRA PRADHAN)
(a) to (c) : Domestic gas, whereas applicable, is allocated under various gas utilization policies framed from time to time. Creation of free gas market through gas trading hub(s)/exchange(s) is desirable to unleash competition and promote efficiency across sectors including power. Government is progressively moving towards a marketing and pricing freedom regime for domestic natural gas through enabling policy framework in recent times to attract investment in Exploration & Production sector and enhance domestic production. In that direction, it has been conceptually agreed to create a domestic gas market platform which will provide level playing field to the gas producers/ marketers/ consumers including power sector. It has potential to offer new opportunities to gas based power units to explore and develop new power consuming markets with matching affordability to consume gas based power.
(d) & (e) : NITI Aayog has informed that there is no recommendation of NITI Aayog to sell GAIL’s pipeline business to a third party.
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