Gas regulator criticises HPCL for CNG cuts

Vol 15, PW 10 (17 Nov 11) Midstream & Downstream

Hindustan Petroleum has dismissed criticism by India’s gas regulator and rival Adani Gas that it irresponsibly cut CNG sales in Gujarat’s largest city Ahmedabad.

PETROWATCH learns the Petroleum & Natural Gas Regulatory Board (PNGRB) received a complaint against state-owned HPCL from privately-owned Adani on November 4, saying HPCL had cut CNG supplies to local cars and buses from its 16 stations in Ahmedabad. “We will write to HPCL and ask for their response as the complaint relates to ‘quality of service’ and affects CNG consumers,” says a PNGRB source.

“We might even consider judicial action against HPCL and a bench (of judges to decide the case) could be set up.” But a HPCL source, when contacted, defends the company’s move saying it was forced to cut CNG supplies when it stopped receiving 49,000 cm/d of D6 gas allocated by the oil ministry for its Ahmedabad operations.

“Our D6 gas supplies were erratic for about eight months but completely ceased on September 24,” says HPCL. “We had no choice but to stop selling CNG.

” HPCL, he adds, resumed partial sales on November 3 of up to 5000-kg/day of CNG from its ‘mother’ station in Ahmedabad, using spot R-LNG. “However, at the current price of nearly $16.45/mmbtu, R-LNG is not viable to ramp up CNG sales to previous levels,” we are told.

Adani is furious as it must contend with the sudden increased demand at its own Ahmedabad CNG stations, and long queues of cars and buses. “Selling CNG is a public service,” claims an Adani source.

“HPCL cannot stop supplies when it wishes. If you are in the public utilities business you must shoulder the responsibility.

” Adani believes HPCL should have informed the central government and the gas regulator before stopping CNG supplies. “HPCL should have also informed us so we could arrange for more gas supplies at our CNG stations,” we learn.