Soon, city gas distributors may not have to tie up supplies for 5 years

New Delhi: The downstream regulator is planning to waive a key condition for city gas distributors — of signing natural gas purchase pacts within 180 days from the award of licence — in response to companies’ reluctance to go for such deals amid a global supply glut that has led to a sharp decline in prices and amplified volatility, said people aware of the matter. The idea behind mandating licensees to compulsorily tie up supplies was to ensure security of supply and smooth services.

But the US shale revolution and construction of several gas export facilities worldwide over the past few years have made supplies plentiful and cheaper, prompting Petroleum and Natural Gas Regulatory Board (PNGRB) to revisit this condition.