The Sectoral Innovation Council under the petroleum and natural gas ministry has pointed out the inconsistencies in the existing gas allocation guidelines notified by the ministry. At a recent meeting of the Council, it was noted that the current situation of the market is unclear with the declared marketing freedom for domestic producers and marketers, taken back or nullified. Further, under the current situation, there are inconsistencies which need rectification for enabling innovative ideas and concepts to enrich the area of natural gas marketing.
Pointing out some of the inconsistencies that require rectification, the Council stated that priorities of allocation to different customers/sectors change with different domestic sources.
Further, prices set by government for customer sectors are different for different domestic gas sources. While KG D6 prices are uniform for all sources, APM gas prices are sector
specific. Besides, even though the recovery of value added components from all gas streams is a declared policy of government, the policy is overlooked for industry owned by private entities for same segment and rich gas continues to flow for fuel applications in Gujarat. The council also pointed out that gas prices are also different for different domestic sources.
In addition, the Council stated that the non-uniform and ambiguous tax structure, which is impairing the growth of the sector, is another area which needs priority attention for rectification to enable the area to grow. Inefficient movement due to Central Sales Tax regime can be overcome by introduction of Goods and services Tax for oil and gaseous products.
The Council stated that freedom for producers and marketers to market would open up avenues for innovative initiatives. With such freedom, in collaboration with transporters, several business models could evolve, which in turn could accelerate development in the area.