Transparent bidding route for regulator for CGD, says PNGRB, Chairperson

Posted By: Religare
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For development of City Gas Distribution (CGD), only transparent bidding route is acceptable for regulator as board fixes only transportation tariff and not the final price, said S. Krishnan, Chairperson, Petroleum and Natural Gas Regulatory Board (PNGRB) at an ASSOCHAM event held in New Delhi today.

On the downstream side, the major investment opportunities are in the laying of pipelines and in City Gas Distribution (CGD) development. Being in the nature of natural monopolies both these areas are subject to regulatory oversight, said Krishnan while inaugurating '16th Energy Summit: Indian Oil & Gas Sector' organized by The Associated Chambers of Commerce and Industry of India (ASSOCHAM) here today.

As of now, the board has made network tariff and compression charges of CNG as biddable parameters. PNG connections to be achieved and infrastructure to be laid have been part of Minimum Work Programme (MWP) and the subsidy on alternate fuels is another aspect which would require close attention...., said Krishnan.

The challenges are the locationally fixed assets and the R.O.U issues. Segregation of Regulatory activity from the non-regulated once is an issue which needs to be appreciated. The current scenario of under utilization of pipelines is essentially due to lack of demand, added Chairperson of PNGRB.

The speakers at the conference discussed about the alternate pricing mechanism for gas. Oil linked pricing (as also recommended by the Kelkar committee) was suggested as a viable alternative to be adopted, which should find acceptance with buyers and sellers.

Apart from pricing a number of other issues were also discussed. Incentives for enhanced oil recovery (EOR), marginal fields and single window clearance were identified as key initiatives that could provide better environment to upstream companies to operate in.

Story first published: Tuesday, March 24, 2015, 23:00 [IST]
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