Oil lobby helps block CNG legislation in Gujarat

Vol 7, PW 25 (10 Mar 04) People & Policy

Gujarats plan to introduce legislation to oversee the use of CNG has hit a roadblock.

Confusion over implementation of the new law, intense pressure from the petroleum lobby and forthcoming general elections are creating hurdles to the introduction of the much-awaited new CNG policy. We may have to notify the bill through an ordinance, a Gujarat source tells PETROWATCH.

If not, the bill will be definitely introduced in the coming monsoon session in June or July this year. A draft of the CNG legislation, known as the Gujarat Motor Vehicles (use of fuel) Regulation Bill, 2003, is circulating in industry circles.

Last January, Gujarat State Petroleum set up a sub-committee with representatives from city gas distribution companies, public transport owners, consumer groups and others to suggest modifications to the draft. On 26th February, the committee met for the first time and agreed minor modifications.

Behind the scenes, the real story is that Gujarat is facing intense pressure from the states petroleum lobby. The petrol and diesel lobby is led by oil majors who dont want the CNG draft to be enacted in its current form, says an industry source.

Conspiracy theorists point to two majors leading the opposition: Reliance and Indian Oil. Another obstacle is sharp disagreement between Gujarats departments of energy and petrochemicals and the states transport department over the proposed jurisdiction of the legislation.

Suddenly, the transport ministry wants GSPC to consult it and get its approval regarding any change, the source said. We have worked day and night to prepare this draft and transport now wants to be the nodal agency for execution of the act.

More, GSPC (the agency charged with overseeing the policy) is facing resistance from Gujarat Gas Company, Adani Energy, GAIL and Bharat Petroleum. Says a top Adani source: GSPC wants to set up CNG stations on the state highways.

We believe it should concentrate on setting them up in cities. A Gujarat Gas source agrees: It is critical to understand the difference between the retail outlet of a petroleum company and a CNG station.