Ahmedabad: After facing opposition for its proposed transportation tariff for the city gas distribution (CGD) network, the Petroleum and Natural Gas Regulatory Board (PNGRB) is facing further push back fromtop CGD companiesof the country who allege that the proposed regulation for open access in the sector sidesteps those who have already invested heavily in the sector.
The PNGRB’s open house on Monday, inviting comments on the draft open access guidelines, part of the public consultation process, saw companies like Torrent Gas Pvt Ltd, Adani Gas Pvt Ltd, GAIL Gas Ltd, Gujarat Gas Ltd (GGL), Mahanagar Gas Ltd (MGL) and Indraprashtha Gas Ltd (IGL) raising concerns about the PNGRB’s move that aims to end exclusivity of supplier after five years of operations.
Any infringement on the infrastructure exclusivity of an entity is not appropriate and will severally harm the interests of the CGD entities who are spending huge amounts on creating infrastructure, Torrent Gas said in its representation.
“The issue of open access has stirred a hornet’s nest in the CGD sector, opening up more disputes rather than finding a solution for increasing CGD penetration in the country,” said a senior bureaucrat in the know of the matter.
The existing draft regulation shall lead to making the overall CGD development project as economically unviable for the authorized entity by making it the supplier of first and last resort for PNG domestic segment only, according to the IGL.
Many of the companies are of the view that despite having repeatedly raised concerns over cherry picking by new entrants, the PNGRB has been ignoring them.
“The Draft Access Code will allow third party marketers and shippers to ‘Cherry Pick’ customers, and thus endeavour to be opportunistic and endeavour to serve a very select customer type or population,” according to the Adani Gas.
Allowing other entities to set-up CNG stations (including dispensers) within such authorized geographical area will be a gross infringement on the interests of CGD entities and against the very understanding under which such CGD entities have bid and been authorized geographical areas, the Adani further said in its representation to the regulator.
The PNGRB shall take due cognizance of pending litigations and order passed by the Courts till date, before finalizing the proposed regulations, the Gujarat Gas said in its comments.
The CGD projects are very capital intensive with a long gestation period.
In acknowledgement of the same, the PNGRB has also extended the market exclusivity period from initial five years to eight years during ninth and tenth bidding rounds, according to the GAIL Gas.
“It is to be appreciated that the CGD industry is still in growing phase and we are yet to achieve market maturity. The CGD sector needs Board’s support and hand holding is necessary for the growth of the sector,” the company said in its feedback to the PNGRB.
“The feedback processes including open houses seem to be eyewash, a mere formality,” said a senior state government official.