CAG pulls up gas utility GAIL India for several lapses

The Comptroller and Auditor General (CAG) has pulled up piped gas transporter GAIL India for passing on Rs246 crore of undue benefit to private power producers with the supply of natural gas at subsidised rates.

CAG also hauled up the state-owned firm for failing to recover Rs29.78 crore from Reliance Industries in penalties for the gas the company overdrew for a month.

GAIL also came in for criticism over its failure to check subsidised gas use by fertiliser companies to manufacture non-fertiliser products.

According to the auditor's report tabled in parliament today, GAIL supplied natural gas at subsidised rates flouting the oil ministry's directives when it supplied gas to consumers generating and supplying electricity to their consumers at commercial rates.

The APM or gas at administered prices was meant only for generation of power for the grid for distribution through public utilities.

GAIL supplying APM gas to power generating companies, which supplied to consumers at commercial rates in 2006, "led to under recovery of Rs 246.16 crore in Gas Pool Account, undue benefit to such producers to that extent and depriving eligible consumers of subsidised/APM gas," CAG said in the report for the fiscal 2010-11.