After coming out with unified tariff for natural gas pipelines, the Petroleum and Natural Gas Regulatory Board is now seeking to revise the tariff policy for the product pipelines laid out by the state-owned oil marketing companies and private refiners, a member of the regulatory board, who did not wish to be identified told FE.
The new tariff structure will depend upon the capacity utilisation, capex, and the internal rate of return (IRR) of the pipeline. This will be a significant shift as the product pipeline tariffs are currently calculated as the 75% of rail tariffs on equivalent rail distance, along the pipeline route, except for LPG (liquified petroleum gas) where it is 100%.
