City gas distributor Think Gas has urged the petroleum regulator to mandate a 30% reduction in LNG terminal usage fees. The company argues that high regasification and truck loading charges are creating barriers for third-party access and keeping gas prices high for consumers. This petition highlights the struggle to lower infrastructure costs as India works to expand its natural gas market.
Think Gas, a major player in the Indian city gas distribution sector, has formally approached the Petroleum and Natural Gas Regulatory Board (PNGRB) to request a 30% reduction in the fees charged for using LNG terminals. The company contends that the current cost structure for accessing this critical infrastructure is prohibitively expensive, which hinders the growth of the broader natural gas market in India.
The Cost Barrier
In its submission to the regulator, Think Gas pointed out specific charges that it believes are preventing efficient market access. Regasification charges currently range from ₹73 to ₹104 per MMBTU, and truck loading fees are between ₹81 and ₹120 per MMBTU. These costs are further increased by an annual escalation clause of 5%. The distributor argues that these high fees make third-party usage of terminals economically unviable for smaller distributors and industrial consumers.
Beyond these standard fees, the company has raised a dispute regarding boil-off gas charges. Think Gas claims that terminal operators often apply these fees even during continuous operations where no actual boil-off gas loss occurs. By labeling these as artificial cost burdens, the company argues that these charges unfairly inflate the final price of natural gas for end users.
Impact on Gas Infrastructure
India currently operates eight LNG terminals with a total capacity of approximately 58.5 million tonnes per annum. Despite this significant capacity, the utilization rates across these terminals remain uneven. The high cost of entry is a major factor, as it discourages third-party players from utilizing available infrastructure. As the Indian Gas Exchange prepares to launch a new platform for booking terminal capacity, Think Gas maintains that structural reforms are necessary to ensure the system is usable and competitive.
Company Context and Strategic Backing
Think Gas holds distribution licenses across 49 districts in India and is backed by a consortium of international investors, including I Squared Capital, Osaka Gas, Sumitomo Corporation, JOIN, and Konoike Transport. Given its extensive footprint in the city gas distribution business, the company’s push for lower infrastructure fees is a strategic effort to improve its own operational margins and drive wider adoption of natural gas among industrial, commercial, and transport customers.
The next important update for the sector will be the response from the PNGRB regarding this petition. Any regulatory decision to revise the terminal fee structure could have a significant ripple effect on the pricing of natural gas in the domestic market, influencing both the profitability of terminal operators and the cost burden for downstream distribution companies.