GAIL to make good APM gas diverted from industrial consumers in Gujarat to city gas distributors

Gail (India) Ltd has offered to fully meet the shortfall in natural gas supplies to non-core industries in South Gujarat arising from the diversion of supplies of natural gas under the Administered Pricing Mechanism (APM) to city gas distribution companies for supplies to domestic consumers and the transport sector.

GAIL said the decision has been taken as per the directives of the ministry of petroleum and natural gas and that it had informed industries in South Gujarat about the restriction in supply of natural gas to non-core sectors in lieu of the diversion of gas under APM to city gas distribution (CGD) companies for supply to domestic households (PNG) and transport sector (CNG).

While this has been done in the larger interest of the consumers, GAIL said, considering the requirement of gas to other industries, it has now offered to supply an equivalent amount of alternative supplies so that such industries do not suffer.

GAIL said some of the affected parties have already availed of its offer to utilise alternative gas in view of the reduced quantity of APM gas. The additional gas being supplied to domestic and transport sectors will enable the government to reduce the subsidy burden on account of LPG and will result in substantial saving in outgo of foreign exchange for import of LPG as well as crude oil, GAIL said in a release.

The overall reduction in APM gas to non-priority sector industries is around 3 to 4 MMSCMD of natural gas, while the reduction in natural gas supplies top non-priority sector customers in South Gujarat will be around 0.3 to 0.4 MMSCMD.

The reallocation of this natural gas to CGD entities will enable cooking gas supply to more than 6.0 lakh households, GAIL said.

At present, more than 8 MMSCMD of natural gas is being supplied to CNG and PNG sector, which includes more than 2.0 MMSCMD supplies to CGD entities in Gujarat.

GAIL has informed all the affected customers regarding the cut in supplies of the APM gas for the non-core sector, which will be effective from 16 September 2014, and has advised them to make use of alternative gas made available to them.

GAIL has offered alternative gas supplies to each affected customer to compensate the shortfall, which may be availed for continuous operation by these industries. There are about 30 customers in South Gujarat, getting the APM gas. None of the customers will suffer due to non-availability of natural gas, GAIL said.

This petroleum ministry issued the guidelines to GAIL on 20 August 2014 following a Supreme Court order directing it to meet the requirement of the CGD entities in different geographical areas in the country.