GAIL says cut gas supplies to Gujarat units on OilMin order

State-owned gas utility GAIL India Ltd today said it slashed gas supplies to small industries in Gujarat on Oil Ministry orders.
Small industries in South Gujarat, which were forced to shut few lines in their plants following GAIL cutting supplies of administered price or APM gas, have accused the state-owned firm of arbitrariness and selective targeting as supplies to similar units in other states have not been touched.
They said GAIL was to pro-rata cut gas of non-priority sectors like steel and refineries to meet city gas requirement but ended up snapping nearly 60 per cent supply to small units, which as per a June 2005 order of oil ministry, were clubbed with priority users in power and fertiliser for fuel supplies. No subsequent order has defined non-priority users.

GAIL in a statement countered the allegation, saying allocation of APM gas supplies was done as per the guidelines of the Ministry.
"In the guidelines, the Government has accorded top priority to City Gas Distribution entities for use of natural gas in domestic households (PNG) and transport sector (CNG) in the larger interest of the common man," it said.
The company, however, did not respond to claims that small industries were included in priority sector along with power and fertilizer and no subsequent order has changed that. Also, the ministry guidelines do not define non-priority industries.

"It is being clarified that allegations made by a section of people on cut in APM gas supplies are not true and there has not been any arbitrary or selective reduction in allocations to small industrial customers in South Gujarat," GAIL said.

The company said emphasis is being given to protect the interest of small customers (those presently having allocation of domestic gas up to 50,000 standard cubic meters per day).
"Under these guidelines, present level of supply up to a maximum of 5,000 scmd is reserved for small customers and kept out from the purview of the pro-rata cut. This allays any concerns of the small customers, including glass units in South Gujarat," it said.
GAIL said the changes had also impacted gas supplies to its own petrochemical plant, which is undergoing a cut of up to 88 per cent.
"All the customers impacted by the changes in APM gas allocation were informed in advance and offered alternate gas so that their operations are not hampered suddenly," it said.

GAIL said based on the Ministry directive, supplies of APM gas to non-priority sector customers have been curtailed by 3-4 million standard cubic meters per day. For South Gujarat customers, this is to the tune of 0.3-0.4 mmscmd.
The reallocation of this natural gas to CGD entities for South Gujarat alone will enable cooking gas (PNG) supply to more than 6 lakh households.