The Planning Commission on Wednesday opposed the proposal to let GAIL (India) Ltd be the sole agency for implementing the proposed National Gas Grid as it would create a monopolistic situation in the economy.
The issue is expected to be discussed with the petroleum ministry in greater detail in the coming days. The petroleum ministry is also toying with the idea of roping in other implementation agencies and is working out a pipeline policy.
The petroleum ministry also sought the reimbursement of cess and royalty to non-oil companies for exploration blocks operated by private and joint venture groups and for pre-NELP (New Exploration Licence Policy) blocks.
The ministry has also suggested doing away with the 5 per cent Customs duty on liquefied natural gas and the 25 per cent duty on plant and machinery used for LNG.
In addition, the need to put in place a transparent subsidy policy for kerosene and cooking gas sold to households was also discussed. Till September 2004, the subsidy on the two cooking fuels was estimated at Rs 7,800 crore (Rs 78 billion), it was pointed out.
Oil companies have been complaining of an under-recovery of around Rs 90 on every cooking gas cylinder sold by them while the under-recovery on kerosene was estimated at upwards of Rs 6 a litre. Private companies like Shell and SHV have also demanded a share of the subsidy extended by the Centre on cooking gas.
It is pushing for infrastructure status for the exploration and production sector and goods status for gas.
At a presentation in the Planning Commission today, the petroleum ministry pointed out that the demand-supply gap in the sector was significant. While the demand estimates range from 150-175 mmscmd, supply is only 82.5 mmscmd.
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