The Petroleum and Natural Gas Regulatory Board (PNGRB) has asked the government to take steps to ensure that there is more competition in the Indian gas market. The board, the regulatory authority for the oil and gas refining and retailing business, has asked the petroleum ministry to give an account of steps taken by the government to ensure that there is a competitive market for gas.It has suggested policy recommendations to foster such competition. These are primarily in the areas of gas transportation and city gas distribution. For instance, the board has raised the issue of the requirement of gas linkage that restricts a retailer from getting into distribution without a firm gas supply contract. Gas availability during the 11th plan period is likely to be mostly from the Krishna Godavari (KG) basin.
The board has called for government intervention because of the fear of a single entity owning a significant proportion of new gas that is likely to be available in the country for the next 3-5 years. Expressing concerns over monopolistic situation in gas pipelines and city gas networks, the board has written to the ministry stating that the absence of multiple sourcing for shippers/marketers of gas is likely to thwart competition in developing gas pipelines and city gas networks, along the value chain.
The whole chain from gas production to marketing could be controlled by producers.
Commenting on the development, a source from the board said: “We have written to the ministry seeking policy changes to provide competition, especially to encourage city gas networks. We have not got any communication from the ministry yet.”
Such apprehensions have lead to a spate of memorandum of understanding (MoUs) between producers and gas marketing companies, which may lead to a monopolistic industrial structure, said the letter.
Reliance Industries, Gujarat State Petroleum Corporation and Oil and Natural Gas Corporation are among the companies that have discovered gas in the KG basin.
While ONGC signed an MoU with GAIL for transportation and marketing of its KG basin gas, RIL and GSPC also got the government’s nod to lay pipelines for transportation of gas from the east to west coast.
On the other hand, Reliance Natural Resources proposal to lay 1,600 kms long pipeline at the cost of Rs 1,400 crore was not approved by the ministry for lack of firm supply of gas.
Via: India Economic Times
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