If the infrastructure is in place, it is far easier to regulate a market. In the absence of adequate infrastructure, as turned out to be the case with gas sector owing to competition, there are now multiple players.
And since the tariff is now decided through bidding process there are multiple bids and varying tariff. Now the question is how to assimilate and bring on par resultant multiple bids and varying tariff. For this we need to have a national gas management system that would result in countrywide uniformity. Gas sector is a valuable energy sector and it is growing but at a slower pace. The India's share of gas in its energy basket as of now is 10 per cent which is expected to reach at least 16 per cent within the next five years as compared to global average of 24 per cent.
The only suggestion which could be made is to allow market forces to operate for gas consumption and gas pricing. This could cover both domestic production as well as import of gas.
When the pipelines authorised by the government or new pipelines being authorised by the Board are implemented, the specific area will find gas supply from more than one network. Country has limited area which is not going to increase. With CGD expansion, pipelines are bound to criss-cross. For example let's take a Greenfield example. Now, another pipeline from Mallavaram to Bhilwara is set to cross it. It turns out to be a common catchment area for serving consumers with the third pipeline being Surat to Paradip.
And, incidentally this common catchment area will offer consumers different tariffs. The East-West is a government authorised pipeline and therefore the Government has decided the tariff for this pipeline. Mallavaram to Bhilwara has tariff suggested by the bidder since the pipeline was up for bidding. On the other hand Surat-Paradip is a yet to be bid pipeline, so for this new tariff will be coming up. The customers in and around a catchment area with the common approach of multiple pipelines will have the freedom and option to avail gas from a pipeline of their choice.
Criss-crossing of pipelines will foster competition which will lead to competitive tariffs, ultimately benefitting consumers. This is a good sign both with respect of supply security and competition.
Although pipelines are not created primarily for the purpose of competition because once laid they constitute in natural monopoly but access to a particular industry or CGD could be from more than one pipeline system in a mature market which would be best for the consumers and this has been the practice in developed and mature gas markets like United States and United Kingdom.
At the same time there is a way out to address this situation as well. For example the tariff fixed by the government and the one set by bidding process are both ceiling tariffs.
So, if this tariff is falling in x players' domain, then that player can very well come forward and suggest fresh tariff thereby encouraging competition. InfralineEnergy thanks B. The column 'In Conversation', is a platform to engage experts from various sectors to share their views on the different transformations happening in the Indian energy sector.
It makes sure that when bidders bid for a tariff they know what has to be done and the kind mount that they need to spend on safety. Are there any suggestions how we can go about creating industry and consumer friendly policies? What are the lessons to be drawn from our experiences in gas sector? For this purpose, it is in the process of providing incentive to both the transporters as well as the shippers in order that more and more swapping takes place.
However, a major constraint in this regard is the issue of State-level taxation which is deterring the parties from going in for swapping. The answer to this would be the coverage of natural gas under the goods and services tax for which the Board has taken up the matter with the Empowered Committee of State Finance Ministers. The reason for the limited number of players in the CGD market is the monopoly of the Central Public Sector Undertakings which were allowed to develop networks prior to the constitution of the Board on a nomination basis.
It is relevant to mention here that 10 entities promoted by GAIL along with the three OMCs were granted Central Government authorisation for 23 GAs without going through the bidding process immediately prior to the constitution of the Board.
As far as the Board is concerned, the Board has tried to ensure maximum competition at the bidding stage so that the benefit of competition flows to the consumers.
Apart from deliberately calibrating the criteria for eligibility for participating in the bidding process to ensure this, the Board along with the CII organised a series of workshops at major locations across the country to create awareness about the regulatory requirements and opportunities emerging as a result of the initiative taken by the Board. These efforts are reflected in the results achieved so far.
In the third round of bidding, 51 bids have been received for seven GAs with most of the bidders being new comers to this sector. The Board is quite optimistic that as a result of its efforts, this trend would continue benefiting the consumers. It is presumed that the reference is to the integrity of the transmission grid. As mentioned earlier, the Board is pro-actively pursuing the establishment of a National Gas Grid which would necessarily consist of a number of pipelines operated by different transporters linked to each other.
In order to ensure smooth technical coordination as well as seamless transmission of gas from any source in the country to any consumer, the Board has to ensure that the integrity of the grid is ensured through regulatory over-view ensuring standardized technical and commercial operation.
This would be integral to a competitive gas market in the country. Incidentally, only the Board is statutorily empowered under Section 11 f of the Act to lay down regulations the technical standards and specifications including safety standards in all activities, including the construction phase, in the petroleum and natural gas sector. The Board is in the process of laying down such standards and safety norms covering specific activities in the sector in conformity with its priorities.
As far as the multi level filling stations are concerned, the Board is in the process of identifying bottlenecks leading to long queues being formed at particular hours at certain CNG ROs. Since it is well nigh impossible to obtain land in urban areas to set up adequate number of ROs, we have to rely on available technology, without in any way compromising with the safety requirements, to cut down on waiting periods for filling CNG. The Supreme Court vide its order dated May 12, has directed that all pending and new applications, in addition to all new applications to be filed in future - to be dealt with by the Board.
J Perform such other functions as may be entrusted to it by the Central Government to carry out the provisions of this Act. B While deciding a complaint under sub-section 1 , the Board may pass such orders and issue such directions as it deems fit or refer the matter for investigation according to the provisions of Chapter V. Monday, 15, Nov, Act Cases. Search Now.
0コメント