Supply PNG to households at a uniform rate, PNGRB tells CGD firms
The oil regulator said this taking note of a telescopic pricing structure for piped natural gas domestic consumers that certain CGD entities are implementing in which the per standard cubic metre (SCM) price of the gas escalates as consumption goes past a predefined threshold.
'Such pricing practices may inadvertently facilitate unauthorised use of subsidised APM (administered pricing mechanism) gas by commercial consumers who may be misclassified as domestic consumers. Additionally, genuine domestic consumers with higher consumption levels may be unfairly subjected to elevated charges, despite natural gas being supplied to CGD entities at a uniform APM rate,' PNGRB said.
Advising CGD firms to undertake a 'thorough review of consumption patterns and investigate anomalous cases where domestic consumers exhibit significantly higher usage relative to industry average,' PNGRB said based on the findings, suitable corrective measures should be instituted as per the regulations.
It also cited the government guideline under which the natural gas allocation is made at a concessional rate compared to market or spot LNG prices with an aim to promote the adoption of the fuel across domestic households and transport sector.
Differential pricing of fuel and the resultant challenges, however, are not uncommon in the oil industry with the national oil companies in the past grappling with diversification of the heavily subsidised liquefied petroleum gas (LPG) cylinders. Meant for use only by households, the 14.2 kg cylinder in the past found its way to commercial establishments such as tea stalls, eateries and restaurants. Eventually, it was through a combination of measures, from change in the pricing structure, direct benefit transfer to targetted subsidy, the menace was reined in to a large extent.
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