The Petroleum and Natural Gas Regulatory Board (PNGRB) has released norms for opening up of competition for city gas distribution (CGD) companies in Delhi, Mumbai and Gujarat. However, the regulator has restricted oil marketing companies (OMCs) from directly supplying compressed natural gas (CNG) from retail outlets, where they are currently supplying CNG jointly with CGD companies.
The move is aimed at mitigating any negative impact on the existing earnings of CGD companies in the CNG segment. The CGD companies had concerns that competition from OMCs would take away their market share. Currently, these entities share fuel outlets with OMCs such as Indian Oil Corporation Limited, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited.
As per PNGRB’s notification, OMC outlets already selling CNG will not be allowed to participate through the open access route. Further, the new entrants will have to set up their own outlets.