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GAIL in trouble over US LNG commitments-V: Break the monopoly
Jun 06: This is as good a time as any for the government to rethink its policy of opposing PNGRB's long standing suggestion to split up GAIL's transmission and marketing functions.
8There is a clear conflict of interest here, as GAIL's network is the backbone of India's gas transmission infrastructure and yet the same company uses up to 80% of this capacity.
8There are many examples of how GAIL pressurizes its customers into one sided gas sales agreements. 
8A recent complaint filed with the PNGRB speaks of shocking highhandedness by the public sector gas major with its customers.
8Then again, other gas suppliers speak of how GAIL creates all kinds of entry barriers, including direct and indirect sops, to retain existing customers when a competitor reaches out to them. The informal waiving of Take or Pay conditions for customers when another supplier comes knocking is a way to keep a customer away from a competitor who cannot afford to waive that clause.
8"Most of GAIL's marketing policies are monopolistic in nature and violate competitive principles but such is the terror unleashed by this monopoly supplier of gas on consumers that most choose to stay quiet than to speak out," a big gas buyer told this website.
8The views of the Modi government on breaking up GAIL into its transmission and marketing arms are not known but the signals are that it supports the status quo. 
8GAIL recently got an infusion of government funds to build the trunk Jagdishpur-Haldia pipeline. This is an argument often used by GAIL to silence its critics: that it builds pipeline infrastructure in places where others will not go even though the counter argument could well be that any pipeline company will build such a pipeline if viability gap funding is granted .
8GAIL is a corporate entity driven by profit as much as its competitors are. It will never lay a pipeline that does not provide for a positive NPV. 
8The sooner GAIL's monopoly is broken up, the better it is going to be for India as the free play will allow more sophisticated global and local players to enter the gas supply business to be benefit of buyers.
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