As per the industry experts, the latest notification by Petroleum and Natural Gas Regulatory Board (PNGRB) on open access has only provided a short-term respite to city gas distribution (CGD) entities as the competition from other players will eventually bring down their profitability in the future. The notification by PNGRB restricts the existing compressed natural gas (CNG) outlets of oil marketing companies in CGD areas from selling the fuel through the open access route.
As a result, the CNG sales volume of existing CGD players such as Indraprastha Gas Limited and Mahanagar Gas Limited will not decrease immediately. The development has come at a time when marketing exclusivity period is already over for incumbent CGD players.
Besides, as per the open access regulation, at least 20 per cent of the CGD network and compression capacity will have to be made available for open access to new entrants. This has further cleared decks for competition and the PNGRB is likely to allow competition in these geographical areas in a phased manner.