Tripathi doing all he can to help CGD sector

Vol 18, PW 25 (13 Aug 15) People & Policy

Among gas retailers in India there's a feeling that it's unfair of oil secretary Kapil Dev Tripathi to force them to meet household connection targets when urgent action is needed to reverse decreasing demand from factories and businesses.

Disappointed at the slow growth of the retail gas sector, Tripathi has called a meeting on August 20 at GAIL's office in Delhi with gas retailers and local authorities from Uttar Pradesh, Maharashtra, Gujarat, Telangana, and Andhra Pradesh. Tripathi wants to focus on removing hurdles to land acquisition by raising awareness among local authorities of the challenges faced by gas retailers.

"CGD (city gas distribution) companies have been given huge targets," admits an oil ministry source. "But unless they get support from local bodies it will be difficult to achieve their targets." Narendra Modi wants 10m households across India connected to piped gas by 2019.

To achieve this the ministry in June raised the yearly target for household connections from 944,600 to 1,392,914. But a GAIL Gas source says focusing on household connections alone doesn't make economic sense.

"We need industrial and commercial customers to help our balance sheets," he says. "Lower gas (spot R-LNG) prices haven't matched the falling oil price and factories are switching to furnace oil, naphtha and pet coke." A ministry source adds India's factories consumed 37% less gas in 2014-15 than the year before.