As the ocus of the government is shifting to creating a gas-based economy, getting more players into the gas infrastructure business and ending any “monopoly” have emerged as a key prerequisite. In this backdrop, the government has nudged the state-owned GAIL (India) to consider creating an independent company for its infrastructure business.
“There is no monopoly…There are other players also in the pipeline infrastructure business today. Still, we need to be more transparent. We have advised GAIL to spin off its infrastructure business into a separate company. The Board of the company will take a call,” Dharmendra Pradhan, Minister for Petroleum & Natural Gas, said in an interview to BusinessLine.
According to the buzz in the power corridors, the Union Cabinet will take a final call on such a proposal. GAIL, which essentially started as a gas transmission and marketing firm, has slowly but steadily expanded into the petrochemical business besides entering the exploration and production sector. Of the over 16,000- km-long pipeline network that currently exists in the country, more than two-third (almost 12,000 km) is owned by GAIL.
This is not the first time that questions have been raised on GAIL’s monopoly. In early 2000s too there was a debate, and subsequently, GAIL had split the accounts of the two businesses, treating them as separate verticals.
While Pradhan is confident that the country will be able to increase its domestic gas output in the near future through varied resources, he also believes that it will soon emerge a gas hub with an exchange.
“We had intended to facilitate a hub. See what is happening in the gas market due to our policy reforms… the expansion of infrastructure and production of gas from various resources will lead to the creation of a hub automatically,” he said.