CNG: All you need is Rs500cr for a licence

Vol 18, PW 15 (26 Mar 15) People & Policy

Soon any company that has invested just Rs500cr ($80m) in oil and gas infrastructure could be allowed to set up CNG stations in a move welcomed enthusiastically by gas retailers and analysts across India as a 'game-changer' that will change the face of the CNG sector.

This recommendation comes in a five-page set of draft guidelines published on March 5 sent to IndianOil, Bharat Petroleum, Hindustan Petroleum, the PNGRB and all gas retailers, giving them 15 days to reply with comments. “This is very significant for the CNG business,” says a gas retailer.

“Until now CNG stations have been treated as part of the CGD business, limited to the geographical area of that company.” But the new guidelines cut the link between CNG for vehicles and piped gas to industries, homes and businesses.

“Authorisation for a CGD business takes so much time,” adds another source. "The CNG business has failed to reach its full potential.

” Sources add the new guidelines are in line with a government drive to increase gas use by constructing more LNG terminals and gas pipelines. “Some LNG can be transported by truck to distant locations and sold as L-CNG (liquefied CNG)," we hear.

"This is happening in a big way in China. Pipeline companies can lay spur lines from their trunk pipelines and sell CNG near highways.

This will increase the conversion of petrol-fuelled vehicles to CNG.”