Mahanagar Gas makes several key recommendations

Vol 10, PW 6 (13 Jul 06) Midstream & Downstream

Maharashtra must offer more concessions in its proposed CNG policy to encourage large consumers to switch from diesel to gas.

Thats the conclusion of the draft CNG policy prepared by Mahanagar Gas under discussion before its adoption by the state government. It recommends several special measures to attract customers.

For instance, CNG stations are currently treated as commercial establishments for the electricity they use and, therefore attract higher tariffs. MGL says CNG stations should be charged lower electricity tariffs because, reducing electricity costs will save operating costs, especially compression of gas.

The cost reduction so achieved, could be passed on to customers. MGL also suggests other ideas to wean away customers from liquid fuels.

Such as, exploring the possibility of reducing subsidies or increasing tax rates on diesel to encourage the shift to cleaner fuels such as CNG. MGL points out that diesel is highly subsidised by the government.

Further, rampant adulteration of diesel with the even more highly subsidised kerosene results in a deterioration in the quality of the fuel, further increasing emissions. MGL reminds authorities that CNG is difficult to adulterate, and produces far less emissions than diesel.

A change in the relative pricing of the two fuels will greatly help in promoting CNG. Maharashtras new CNG policy should also, says MGL, ensure the speedy grant of RoUs to lay pipelines to develop CNG infrastructure.

As of now, obtaining RoUs or RoWs to lay pipelines can be a cumbersome, bureaucratic and frustrating experience for investors interested in developing CNG infrastructure. Adds MGL: Support from the state government in ensuring that these RoUs are granted in a timely way without undue delay will help in the rapid roll-out of CNG infrastructure.

More, the state government should help in the allotment of land to set up CNG stations at important nodes in cities or along highways. Finally, MGL suggests that Maharashtra set up a monitoring panel headed by the industries minister to periodically review the implementation of the CNG policy and remove all possible bottlenecks in the way.