'Value- ased' Mechanism Proposed

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‘Value- ased’ Mechanism Proposed

 

In 2008, a ministerial panel had de­cided to allocate ga§ to priority sectors: fertiliser, LPG, power, city distribution for domestic and transport, and other sectors such as steel, petrochemicals, refineries, city distribution for supply .

 
The demand for natural gas in India was 179 Million Metric Standard Cubic Meter Per Day (mmscmd) in 2010-11 and is projected to be 473 minscmdby 2016­17, according to the 12th Plan document of Petroleum and Natural Gas Ministry. Against this, the total production from indigenous sources was 146 mmscmd in 2010-11. With the gap between gas demand and availability widening, pres­sure is mounting on the Government to review its natural gas allocation policy
In 2008, a ministerial panel had de­cided to allocate ga§ to priority sectors: fertiliser, LPG, power, city distribution for domestic and transport, and other sectors such as steel, petrochemicals, refineries, city distribution for supply to commercial and industrial sectors consuming up to 50,000 standard cubic metres a day, as well as captive power plants.
Natural Gas must be allocated in a manner that maximises value for the nation. The Government could go in for a ‘value-based’ mechanism, as adopted by some progressive coun­tries.
‘Value-based’ allocation is char­acterised into three parts:

  • Economic value-added.
  • Social benefits (derived from job creation, knowledge transfer, etc.)
  • Environmental impact.

After this, the “value” potential of the proposed industrial projects is computed to make an “apple to apple” comparison to select those that can be funded or dropped.

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