Fertiliser sector gets a reason to smile  

The fertiliser sector a reason to smile. The Centre, in a signifiquent move, has accepted Tariff Commission?s recommendations on pricing and supply of natural gas/LNG to the fertiliser sector. This may provide consumers of fertiliser a relief as the fertilisers manufacturers may pass on the sop to the latter.

Shipping rate would be revised to $0.2483 per MMBTU as against $0.2597 per MMBTU, stipulated at present in the gas sale purchase agreement. Regasification charges of LNG offered by Petronet LNG Ltd (PLL) to consumers would be Rs 23.85 per MMBTU as against Rs 23.70 per MMBTU with 5% escalation per annum.

Transportation tariff charged by GAIL India will be at a levelised uniform rate of Rs 831 per million cubic meters (MSCM) for both Hajira-Bijaipur-Jagdishpur (HBJ) and Dahej-Vijaipur pipe line (DVPL) pipelines.

Marketing margin has been suggested at Rs 1.97 per MMBTU instead of Rs 5.04 per MMBTU. The heating values (both gross and net) in MMBTU terms may be indicated for both natural gas andregasified LNG.

Moreover, apportionment of cost in tariffs for spur/feeder lines will depend on specific conditions. Broad parameters, however, suggested by the Centre will be used.

Sources told FE that the petroleum ministry would issue necessary instructions, with regard to implementation of these recommendations, in respect of regasification charge, shipping rate, marketing margin, transportation tariff and billing of natural gas and LNG. Revised rates would remain in operation till the Petroleum & Natural Gas Regulatory Board decides otherwise.

The Centre has already authorised GAIL India and PLL to search for sources of gas and LNG for the fertiliser sector and make recommendations regarding pricing on a continuing basis. ?The petrolum ministry will ask GAIL India to formulate a plan of action for availability of natural gas/LNG and its transportation to FO/LSHS based ura plants of National Fertiliser Ltd (NFL) situated at Nangal, Bhatinda and Panipat,? sources said.

Moreover, GAIL India will make available its pipeline infrastructure to other suppliers/buyers of natural gas and LNG on open-access basis and common carrier principle. In case of any dispute, the petroleum minister will adjudicate in the matter till the Petroleum and Natural Gas Regulator is in place.

The Centre has also asked the petroleum ministry to coordinate for working out priority allocations for the fertiliser industry at different locations.

Source: The Financial Express, Mumbai, September 15, 2006
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