HYDERABAD: Another instance of the Gas Authority of India Limited (GAIL) `unfairly' collecting excess amount, this time Rs. 713 crores, from gas consumers in Andhra Pradesh, especially power projects, has come to light.

A committee comprising Surya P. Sethi, Principal Advisor (Energy) Planning Commission, and Ashok Chawla, Additional Secretary, Economic Affairs, Ministry of Finance, found that GAIL had unjustly collected the excess amount by supplying gas to consumers in the State at market price instead of the `controlled (Administered Price Mechanism) price'.

The two officials were appointed by the Centre to verify Andhra Pradesh's grievance against GAIL for increasing the price of gas from Ravva Fields from US $ 3.30 to $ 4.3 MMBTU (million metric British thermal units) from September 2006. This is against the APM price of $ 1.8 per MMBTU at which the GAIL has to supply at least 55 MCMD (million cubic metres a day) of gas to its consumers in tune with a Central tariff order issued in June 2005.

The committee reported that 12.5 MCMD was sold at market price of $ 3.3 per MMBTU instead of the controlled price in two spells — July 2005 to March 2006 and April to September 2006. The excess of Rs. 713 crores collected from the State was diverted to the `gas pool account', which is to be used to cover the price fluctuation when gas is purchased from outside sources.

GAIL's contention

GAIL's contention was that the consumers were supplied non-APM gas procured from other sources at higher prices.

The committee found that GAIL collected an excess of Rs. 28 crores from consumers in other States also, and faulted it for collecting higher price. With this, the excess collected by GAIL from the State reached a whopping Rs. 1,320 crores.

It had earlier collected Rs. 607 crores as `transmission charges' from APTransco although its pipelines did not supply at the specified level following which the power utility sought refund of the money.

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