Ministry: 'Gas as important as water-power!'

Vol 18, PW 21 (18 Jun 15) People & Policy

A radical change to how gas retailers are classified could allow them to work more efficiently and save costs.

PETROWATCH learns the oil ministry wrote to the urban development ministry on June 4 demanding prized 'public utility' status for city gas distribution networks - a move that would make them as important as water, electricity or sewage services. “We’ve written a letter,” confirms joint secretary (gas pricing) Ashutosh Jindal.

“Once the new classification is in force housing ‘colonies’ (estates) will have no option but to allow gas pipelines to be laid. At present gas retailers spend a lot of money to secure RoU clearances.

” This move, adds Jindal, is in line with Narendra Modi’s target to connect 10m homes with piped gas by 2019. “Right now private companies pay huge charges to local authorities to restore sites after digging,” says Jindal.

“Gas retailers don’t make huge margins like telecoms companies so these costs hit them hard. Once the CGD sector is treated as a 'public utility' companies will no longer be forced to pay compensation.

” Around 2.9m homes receive piped gas in Delhi, Mumbai and Gujarat. Of these 1.4m are in Gujarat.

“We need to work on scaling up new cities quickly like we did in Gujarat,” says Jindal. "The ministry and PNGRB are working to increase the number of household piped gas connections in Bangalore, Kolkata, Chennai and Hyderabad.


LNG Summit