| It has also said there should not be any additional cost to the end user. The direction has come in the backdrop of the government reviewing liquefied natural gas (LNG) import guidelines. |
| "PMO has insisted domestic shipping companies that there should not be any additional cost for the LNG importer whether it is carried by Indian flag vessel or foreign flag vessel," said high placed sources. |
| Currently, Director General of Shipping (DG Shipping) restricts LNG import only on an Indian flag vessel or Indian company holding a minimum of 26 per cent ownership of the ship. |
| Now, government is planning to relax the guidelines which would allow LNG purchaser the choice of transportation""fob (free on board) or CIF (cost, insurance and freight). |
| A senior executive of Indian shipping company confirmed that the PMO had asked for the freight cost details. "The cost of LNG haul by Indian vessel is 0.5 per cent more than foreign vessel. This is due to the local taxation system in India. However, this is not a concern as we are ready to bear the additional cost," he said. |
| He said the LNG transportation by foreign vessel might be slightly profitable for the time being but the picture will not remain the same in the long run. Moreover, the country will have no control in freight rates in future, he added. |
| Earlier, Indian shipowners had met Shipping Ministry officials to ensure equity participation in LNG haul which would give the country control on this "fuel of future". According to a Shipping Corporation of India (SCI) senior executive, allowing LNG importer the choice of fuel transportation would lead to crisis in emergency situation like war. |
| "No foreign lines will be available to carry this strategic commodity at the time of war. This will lead energy security of the country at risk," he said. Japan and Korea the major importers of LNG and they adopt fob model for bringing LNG, he said. |
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