City Gas Distribution: New gas licences promise solid gains

Consumers have never had it so good as far as potential availability of cleaner and cheaper gas for their energy needs is concerned, with 136 geographical areas (GAs) being awarded in the ninth and tenth round of city gas distribution (CGD) licence auctions in the last two years. This is a huge jump over the 91 GAs awarded in eight CGD rounds over the preceding eight years.

This acceleration has been accompanied by the entry of new players in the CGD space. Almost 50% of the 136 GAs were won by Adani Gas and the oil marketing companies, outbidding incumbents like Indraprastha Gas, Mahanagar Gas and Gujarat Gas—the new entrants were aggressive with their bids even as the existing players concentrated mostly on return on capital. After the tenth round, CGD licences have been auctioned for 228 GAs in all, comprising 402 districts across 27 states and union territories.