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City gas firms top priority in allocation of domestically produced natural gas

Giving top priority to these firms for the allocation of domestically produced natural gas would ensure adequate supplies of the green fuel to vehicles and domestic kitchens at reasonable prices at a time when the domestic output of gas is far short of demand.

Mail Today Bureau   New Delhi     Last Updated: July 29, 2014  | 15:06 IST
City gas firms top priority in policy rejig
Photo for representation purposes only. (Source: Reuters)

The Committee of Secretaries (CoS) has approved the proposal to give top priority to city gas distribution companies like Indraprastha Gas Limited (IGL) in the allocation of domestically produced natural gas, which is much cheaper than imported liquefied natural gas.

A senior official said that this would ensure adequate supplies of the green fuel to vehicles and domestic kitchens at reasonable prices at a time when the domestic output of gas is far short of demand. "The issue will now go to the Cabinet Committee on Economic Affairs for final approval," the official added.

Currently, urea-manufacturing plants have the first right over domestically produced gas followed by liquefied petroleum gas (LPG) plants and power stations. City gas distribution (CGD) projects are ranked fourth in the priority list.

The CoS agreed to change the priority listing to give CGD firms like IGL, which sells compressed natural gas (CNG) to automobiles and piped gas to households in the Capital, top priority, they said.

CGD firms get 8.32 million standard cubic meters per day (mmscmd) of gas out of total domestic supplies of about 77 mmscmd. As gas projects get rolled out in new cities, the requirement of the sector will grow and so the government is now giving it top priority.

The government feels that CNG and piped natural gas (PNG) are clean fuels and will help replace subsidised diesel in automobiles and LPG in households.

According to the new policy, extra requirement for CGD will be met first, by imposing proportionate cuts in domestic gas being supplied to sectors other than priority sectors as decided by the ministry of petroleum and natural gas.

Plants providing inputs to strategic sectors of atomic energy and space research will get the second priority followed by plants that can extract higher fractions from natural gas. Gas-based urea plants will rank fourth in the list and power stations will be placed in fifth spot.

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