PNGRB withdraws notices to declare 54 CGD networks as common carriers

New Delhi: The Petroleum and Natural Gas Regulatory Board (PNGRB) has withdrawn notices to declare city gas networks in 54 licensed geographical areas (GAs) as common carriers. This is likely to prompt the withdrawal of the ongoing legal cases filed by city gas distribution (CGD) companies against the proposal issued by the regulator. “… public notice No. PNGRB/Auth/CGD(02)/2021 dated 13th September, 2021 issued by the Board in respect of declaration of 54 CGD Networks (Annexure-I) as common carrier or contract carrier in terms of provisions under Section 20 of the PNGRB Act, 2006 and sub regulation (1) of regulation 6 of the PNGRB (Guiding Principles for Declaring City or Local Natural Gas Distribution Networks as Common Carrier or Contract Carrier) Regulations, 2020 stands withdrawn with immediate effect,” said an order dated May 27.

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The companies that will get a reprieve after the withdrawal of the public notice include Indraprastha Gas Limited, which holds the licence for the National Capital Territory of Delhi, and Mahanagar Gas Limited, which has the licence for Mumbai & Greater Mumbai, among others. The CGD companies have challenged the PNGRB proposal legally.

Why does PNGRB want to declare CGD networks as common carriers?

CGD GA licence-holders are allowed two kinds of exclusivity: first, they have exclusive rights to lay, build and expand gas supply infrastructure, and second, other suppliers are barred from using the infrastructure. There is a set date for the expiry of these exclusive rights, as decided by the PNGRB, to promote competition and fairness as the market matures. After the expiry of the exclusivity rights, the PNGRB is free to declare the infrastructure created by the CGD company as common carrier.

The exclusivity period for both Delhi and Mumbai have expired in 2012. Even though the PNGRB has withdrawn notices for declaring CGD networks as common carriers, it may decide to pursue the same in the future again, said industry sources. Ending exclusivity rights will bring in fair competition among suppliers and may even bring down cost, which is crucial for the expansion in the share of natural gas, said sources. The government has set a target to increase the share of natural gas in the country’s energy mix from the present 6 percent to 15 percent by 2030.   

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