Open access norms: Regulator gives short-term respite to CGD players
Even as the Petroleum and Natural Gas Regulatory Board’s (PNGRB) latest notification on open access has provided a short-term respite to city gas distribution (CGD) players, the sector experts feel that competition from other players will ultimately weigh down on their profitability in the future.
In the notification, PNGRB has not allowed existing compressed natural gas (CNG) outlets of state-run oil marketing companies (OMCs) in CGD areas to sell the fuel through the open access route, implying that CNG sales volume of existing CGD players like Indraprastha Gas IGL and Mahanagar Gas (MGL) will not decrease immediately. However, a section of the industry noted that competition is imminent and profitability would be challenged eventually.
