Room for more

New Delhi, May 9: Gail (India) Ltd is all set to win a heated battle with Indian Oil Corporation (IOC) and Bharat Petroleum (BPCL) over supplying liquefied petroleum gas (LPG) through its Rs 500-crore Vizag-Secunderabad pipeline which has been lying idle for close to a year.

A senior Gail official told The Telegraph that the petroleum ministry has sent a directive to IOC and BPCL to start despatching LPG through the pipeline.

The directive is reported to have been issued after the Gail team headed by CMD Proshanto Banerjee took up the issue with petroleum secretary B. K. Chaturvedi.

Sources disclose that the Gail management asked the petroleum ministry to intervene in the matter as the pipeline had been completed in June 2003, and the huge investment was lying idle as IOC and BPCL had refused to use it.

The fact that Hindustan Petroleum Corporation, which has a refinery in Vizag, has already started using the pipeline has taken the wind out of the sails of IOC and BPCL. The two companies had taken the stand that the tariff of Rs 1.42 per tonne per km fixed by Gail was too high as LPG was being supplied to consumers at a subsidised price.

However, Gail officials point out that this is a price fixed by the petroleum ministry and the investment in the pipeline has been worked out on the basis of this price.

They further point out that the price of transporting LPG by road works out to around Rs 3.40 per tonne per km which is far more expensive than the pipeline charge. While the truckers charge Rs 1.70 per tonne per km, the total transport bill is worked out on a round-trip basis. In short, if the truckers carry the gas for 100 km they also charge for the return trip that they make to Vizag.

Gail officials said if Indian Oil is supplying LPG at a subsidised rate, there is all the more reason for them to switch to the cheaper pipeline route and save money.

Allegations of the powerful truckers’ lobby holding sway have also arisen on the issue. Since the switch to the pipeline would hit the lucrative road transport business, it is alleged that vested interests have been coming in the way.

Pipelines are the most efficient and environment-friendly mode of transporting petroleum products and are preferred to road or rail in most advanced countries. In the US, for instance, 58 per cent of products are moved by pipeline. In India, this proportion is around 30 per cent but with more pipelines under construction, this percentage will go up. Trucks provide only the last mile linkage in any advanced system of marketing petro goods.

Pipelines are also considered the safest and fastest mode of transporting petroleum goods. The heavy tanker movement on the busy Vizag-Secunderbad highway poses a serious traffic hazard and a switch to pipeline transportation of the high-pressure cooking gas would bring down the risk of accidents. There is also less pilferage in pipeline transportation compared with road or rail.

Reliance plea

HPCL has rejected Reliance Industries’ request for a capacity in its proposed Rs 1,367-crore Mundra-Delhi pipeline, says PTI.

The PSU intends to lease out 25 per cent of the capacity to other firms. “Reliance has not agreed to give the take-of-pay agreement for 25 years for the 2.5 million tonnes they want in the pipeline,” HPCL told the petroleum ministry.