GAIL’s Rs 20 hike in tariff will translate to Rs 3,400 crore per annum: Sandeep Kumar Gupta

Sandeep Kumar Gupta, CMD, GAIL (India), says the Rs 20 increase in tariff which they have filed will translate to Rs 3,400 crore per annum and they are very hopeful that at least two elements out of this, – Rs 1,200 crore for true up-of-the-system use gas cost and about Rs 800 crore due to the APM price deallocation and the capacity determination totalling Rs 2,000 crore – is certain. We expect that this development should be there in the next month itself.
How do you see the proposed tariff changes by PNGRB and how does GAIL benefit from this?
Sandeep Kumar Gupta: The public consultation document which has been floated by PNGRB proposing certain changes in the regulation covers two-three main changes. First, there will be only two zones instead of the three zonal tariffs presently available and the silver lining is that for all CGDs, for their domestic PNG and CNG volumes, only zone one tariff will be applicable. This will be a big positive for GAIL which is present in 72 geographical areas out of the total 307 geographical areas.

The second change pertains to the isolated networks where presently the normative capacity is reckoned for the purpose of tariff determination, whereas the actual volumes are much lower. So, the change proposed is that the actual volumes will be considered. This again will be very positive for our isolated networks in Agartala, in Cauvery basin, in Gujarat region and we expect that about 130 crore per annum will be a benefit out of that.
The third change pertains to the retention of 50%