People's Democracy

Form A National Gas Grid 

CPI(M) MP Writes to PM

CPI(M) Polit Bureau member and MP, Chittabrata Majumdar, has written the following letter to prime minister Dr Manmohan Singh on December 27, 2006 regarding formation of a National Gas Grid to ensure equitable distribution of natural gas in the country. 

WE had expressed time and again our strong reservation against any change in the Draft Gas Pipeline Policy, September 2003, which had clearly stated that all inter-state natural gas pipelines will be built by a company to be notified, by the government and till it is notified, by Gas Authority of India Ltd (GAIL). The Draft policy was in tune with Para 2.4 of the Cabinet Note for formation of GAIL in January 1984 which stated “In the course of time it is visualised that a national grid of gas pipeline will have to be developed having regard to gas availability, utilisation pattern and the capital investment involved.” For this purpose, the ONGC was split in January 1984 to form GAIL so that it can concentrate on Gas Transmission Pipeline as the first step towards a National Gas Grid to promote regional balance and energy security. This vision would be compromised if private players are authorised to operate in selected remunerative area of inter-state gas transmission. As a matter of fact, the West Bengal government had also conveyed to the government of India its concern on the serious regional imbalance in the matter of equitable distribution of natural gas in the country in absence of a national transmission infrastructure. It was made clear that the responsibility of expanding gas market to the gas starved areas like Eastern Zone and Southern Zone cannot be left to market forces. An inter-state gas pipeline should be built and managed by a nodal public sector undertaking having expertise and experience in the field. Global experience also shows that energy transmission business has been considered to be natural monopoly under the government as national resource like natural gas is owned by people of the country not by the so called stake holders. In India, Power Grid Corporation of India, a PSU, has been entrusted with building National Power Grid in power sector and this needs to be replicated in gas sector also. 

I regret to note that in spite of such reservations there are moves by the petroleum ministry to approve inter-state pipeline projects to private operators on the basis of their upstream tie-ups (Gas Supply). This is a queer logic in the sense that ONGC was split to separate upstream players so that GAIL can concentrate on natural gas pipeline. Now it is the other way round and private sector is being allowed to have complete vertical integration starting from upstream area of gas production along with transmission and distribution of the same. This goes totally against the concept of level playing field and I am afraid it would lead to a huge private monopoly compromising energy security of the country. The pick and choose policy on gas pipeline, as is being formulated by the ministry, would only encourage cherry-picking of natural gas business by private investors leading to non-optimal, imbalanced utilisation of gas resources in the long run.

I, therefore, reiterate that a national gas grid should be formed as per the Gas Pipeline Policy, September 2003 with GAIL as a nodal agency in line with the cabinet decision in January 1984. I request you to kindly intervene so that a National Gas Grid is formed in the lines of National Power Grid to ensure equitable distribution of natural gas in the country.