GAIL objects to low transportion rates

GAIL has protested against the Tariff Commission fixing lower transportation charges for the Hazira-Vijaipur-Jagdishpur (HVJ) pipeline and the Dahej-Vijaipur pipeline.

The commission has fixed the HVJ transport tariff at Rs 679 per thousand cubic meter, but GAIL wants it to be raised to Rs 1,091 per thousand cubic meter.

"The proposed tariff neither provides for any capital recovery (depreciation) nor the targeted rate of return of 12% post tax on equity," a top GAIL official said today.

"Besides, the tariff computation does not take into account the decline in ONGC gas volume projections and increase in the cost of future replacements of compressors/ other equipment that has been considered at current cost," the official added.

For the Dahej-Vijaipur pipeline, the official said although the current supplies of regassified LNG are 17.55 million standard cubic meters per day (MMSCMD) at 100% capacity, the tariff was computed considering 23.9 MMSCMD from 2009 with no firm commitments available to GAIL.