Regulator set to let â€کgrocers' enter gas business

Vol 13, PW 14 (17 Dec 09) People & Policy

India’s gas regulator is under fire over proposals to make it simpler for people who want to set up a company selling CNG or piped gas.

Most anger centres on a proposal making eligible any group of three persons setting up a company with just a year’s experience of selling piped gas or CNG. “Is the regulator saying such a new company is equal to companies like BG, Adani Energy, Reliance or GAIL Gasâ€‌ asks an observer.

“This kind of approach will discourage established players. At this rate, even grocers could become gas retailers!â€‌ Another bitter source says the gas business comes with significant health and safety risks, which make it unsuitable for novices or people with little or no prior gas retail experience.

“That’s why,â€‌ he says, “it’s essential to have a robust organisation with sound technical experience running such a venture, not greenhorns.â€‌ He adds that if newcomers with only a year’s experience are allowed to sell CNG or gas they will most likely be fly-by-night operators interested only in selling their licences.

“Serious players will wonder if they can ever compete and win licences in such a situation,â€‌ we hear. Gas retailers are also angry because the regulator hasn’t considered any of the detailed inputs they sent in by October 10 about how the industry should be regulated.

“Thirteen or 14 companies responded to the regulator’s invitation to send in suggestions on how the industry should be regulated,â€‌ says a source. “But none of those ideas were even considered.

Instead, the regulator has sent around three proposals that would give it even more powers. Why did we waste our timeâ€‌ When contacted, a Board source was defensive.

“Nothing is finalised yet,â€‌ he says. “We have asked only for comments.

We have kept with the spirit of the (Petroleum & Natural Gas Regulatory Board) Act, which says that an entity can be a person.â€‌