The Petroleum and Natural Gas Regulatory Board (PNGRB) which is the market regulators in the field have pushed for adding Natural Gas (NG) in the Goods and Service Tax (GST) regime in order to ensure a fairer domestic market hub which the country is trying to build around the piped gas section of the industry.
Freedom in pricing, pipeline tariff reforms, and a uniform tax will also act as a building factor to facilitate the proposed gas trading hub a reality and make it commercially viable for private players and others to participate in.
The downstream regulator PNGRB is overlooking Indian as markets transition into a major trading hub for piped natural gas and has felt the urgent need to reform the industry in order to make the ambitious plan a success.
Petroleum products such as natural gas, petrol, diesel, aviation turbine fuel were not included in the GST regime when they were brought and still turn out to be the biggest cash cows for the states in order to fund themselves and for the central government as well who have gained as much from these petroleum products sale as the states. The problem is that the state applies tariffs on the sale in that particular state only, and the rates vary from state to state and when someone enters into a physical contract with a supplier the cost of supply thus will vary which will be highly unsatisfying for the large customer base that is projected in India under the market hub project.
Reforming a pipeline tariff regime is equally important, and it, along with tax reform, should precede a gas hub, which will then set the tone for the future success of this plan.
Tags : NG, PNGRB, GST,