Sarraf sympathetic to Covid-19 delay requests

Vol 23, PW 11 (09 Apr 20) People & Policy

PNGRB chairman DK Sarraf has promised leniency to companies declaring Force Majeure at CGD-IX and X areas because of the 21-day national lockdown until April 14.

Sarraf, who retires in December (2020), confirms to this report that the regulator will look favourably on declarations of Force Majeure after Narendra Modi announced the nationwide lockdown on March 24 to combat the Coronavirus pandemic. "I am unaware of anyone sending it (Force Majeure declaration) in," said Sarraf, on April 1.

"Irrespective, we'll see what we can do; we are aware nobody can work and will keep this in mind when things normalise." An industry source tells us Force Majeure is defined and set out in Regulations 2 and 14 of the Petroleum and Natural Gas Regulatory Board Act, 2006.

He believes gas retailers with CGD-IX and X areas will need to stop work for a minimum of twelve months. "State governments will continue restrictions depending upon how Coronavirus is affecting them, even if the (national) government lifts the lockdown on April 14," says a CGD company source.

"Companies will find it impossible to work for another three or four weeks or until end-May." From June onwards, monsoon rains set in until late September preventing CGD players from working on the ground.

Gas retailers will also struggle to buy vital equipment, including booster compressors, gas grade plastic granules, and pipe fittings, from China or Europe.