India to simplify gas pipeline tariff to boost demand

India is simplifying its gas pipeline tariff structure to make the fuel more affordable and to attract investment for building gas infrastructure in the country, oil minister Dharmendra Pradhan said on Wednesday.

Prime Minister Narendra Modi has set a target to raise the share of gas in India’s energy mix to 15% from the current level of about 6.3% to cut its carbon footprint. Use of gas is also set to rise as India wants to push local manufacturing to cut costly imports and lift its battered economy.

Pradhan said the new tariff structure would help to create a single gas market in the country by attracting investment to complete the gas grid and make it more easily accessible. He did not provide more details of the new pricing structure.

The oil minister said India’s current “zonal” tariff rates for gas pipelines resulted in higher transportation charges and had hindered development of gas markets and demand centres in remote areas.

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