Maharashtra looks at CNG policy from Mahanagar Gas

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

Maharashtra, the countrys most industrialised state, is laying the groundwork for a comprehensive Compressed Natural Gas (CNG) policy.

PETROWATCH learns the state governments gas advisory committee met on 27th June in Mumbai to discuss a draft CNG policy submitted by Mahanagar Gas, a joint venture between GAIL, British Gas and the Maharashtra state government. Prepared on the request of state authorities, no decision was taken on the draft policy, but another meeting is scheduled for later this month.

What does MGL suggest Broadly, MGL wants state authorities to provide support for the rapid development of CNG infrastructure. Among its key suggestions are soft loans to enable public transport operators to convert their vehicles to CNG or to buy new vehicles that run on CNG.

MGL believes the cost of converting to CNG can be prohibitive for certain categories of vehicle owners, and that the state government could encourage conversion by providing soft loans through banks. More, funds collected as non-compliance penalties could be used to fund a system of grants to assist bus operators in conversion to CNG, thus balancing the stick of penalties with the carrot of financial assistance.

MGL also suggests that the government make it mandatory for public vehicles to be converted to CNG use, as in Delhi. Such a measure, said MGL, ensured the use of CNG in public vehicles in Delhi.

Vehicles that missed the deadline were penalised with fines. Although some of the timelines were not met, Delhi is today considered to represent a city which has benefited considerably from CNG.

Another MGL suggestion is to lower the registration rates for new vehicles using CNG and a reduction in road tax for CNG-fuelled vehicles. MGL also suggests that locally manufactured CNG kits, cylinders and components be exempt from excise and sales taxes.

Import duties on imported CNG kits, CNG cylinders and CNG kit components can also be reduced, says MGL.