VAT Exemption Sought to Lower LNG Price - The New Indian Express

VAT Exemption Sought to Lower LNG Price

Published: 19th January 2014 11:09 AM

Last Updated: 19th January 2014 11:09 AM

The Union and state governments should exempt Kochi Petronet LNG from Customs duty and value-added tax (VAT) in order to bring down LNG price in the state, observed the ‘Mission LNG’ workshop organised by the Kerala Chamber of Commerce and Industry (KCCI) here on Saturday.

“The high cost of LNG is the most important prohibitive factor that stands in the way of buying and using of LNG by consumer segments. The pricing structure of natural gas in the country in highly distorted in favour of the states that have proximity to gas fields. Natural gas from Bombay High is being sold for $2.5 to $4.2 per MMBTU. The re-gasified LNG from import terminals at Dahej and Hazira ( both in Gujarat) is being sold for $10 to $12 per MMBTU. But the price of gas from newly-commissioned terminals such as Cochin ranges from $19 to $24 per MMBTU. At this price, no industry, commercial or domestic, can afford to make use of the gas,” said Union Minister Prof K V Thomas, while delivering the keynote address at the workshop.  Director of the Centre for Green Technology and Management M P Sukumaran Nair said as Kerala does not have gas fields, it is eligible for a legitimate share of domestically-produced gas.

“Now Cochin LNG terminal has been commissioned and Kerala has adequate infrastructure for receiving natural gas. Hence Kerala should raise its claim for a due share of  domestic gas considering the federal setup of the country. The preparedness of KSEB, KSRTC and the present condition of Kochi city gas distribution venture is at a very low ebb. These departments should have been ready with their projects  in line with the commencement of operations of Kochi LNG terminal. They may be instructed to speed up their projects for gas utilisation. Private consumers such as the BSES might also be asked to switch over to LNG,” he added.

The workshop formed a committee under the leadership of KCCI director board member Biju C Cherian to monitor the follow-up activities of ‘Mission LNG’.

The next meeting in this regard will be held after three months to review the progress.  CITU leaders K Chandran Pillai, K N Ravindranath, KCCI Chairman E P George, S Sarma MLA and GAIL Deputy General Manager K P Ramesh also spoke at the event.

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