Coming soon: Rs 10 cess on gas to build fund | business | Hindustan Times
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Coming soon: Rs 10 cess on gas to build fund

business Updated: Jul 07, 2009 22:18 IST
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The government will soon set up a National Gas Highways Fund for part-financing the Rs 30,000-crore national gas highways scheme announced by Finance Minister Pranab Mukherjee in his budget proposals. The proceeds of this fund will be raised by levying a cess of Rs 10 per unit on gas sold in the country, a senior petroleum ministry official said.

With the sale of natural gas expected to increase from the present 130 million standard cubic meters per day (mmscmd) to 200 mmscmd by the end of the current fiscal year, the cess on gas sales can help raise Rs 2,400 crore a year.

Cess is presently imposed on petrol and diesel sales in the country and the proceeds are used for the development of National Road Highways and other roads.

As the new gas highways project, which proposes to lay 6,000 km of new pipelines, will take four-five years to complete, the proposed cess would help in building the corpus of this fund between Rs 12,000 crore and Rs 15,000 crore. In addition, the ministry has also proposed approaching the World Bank for funding the gas highways project.

The gas highway, when ultimately integrated with the existing gas pipelines, will lead to the National Gas Grid consisting of existing, authorised and planned pipelines and also connect missing links to remote and under-developed areas.

“The modality for managing the cess fund and setting up pipelines would be devised through an apex-level committee headed by the petroleum secretary along with senior officials from the Planning Commission and the ministries of finance, power and fertiliser,” the official said. Th committee’s main role will be to identify and approve funding of gas pipelines required to transport gas to remote areas.

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