City gas sector may finally seem some competition

livemint.com:

Mint that the regulator would soon roll out new rules to allow for multiple natural gas operators to compete in various markets, especially those where infrastructure and marketing exclusivity for single companies is ending. “However, it will be ensured that existing companies do not face any impact, such as new companies taking away attractive locations (with greater demand and footfalls), and that the new companies are ready to cater to remote and underserved areas," Jain said, adding that the market would be opened up through an open and fair process.

Infrastructure exclusivity refers to the exclusive right to not only use current pipelines and related infrastructure, but also the right to set up new infrastructure in the designated areas, while marketing exclusivity refers to the right to solely market and sell CNG and PNG in allocated areas. Exclusivity periods vary across licences.

The maximum period for infrastructure exclusivity is 25 years and that for marketing eight years. The regulator had to roll back a similar attempt in fiscal year 2021 after a pushback from the incumbents, and so the new plan may run into resistance as well.

If it does work out, it would end the dominance of sole natural gas operators, and allow consumers the luxury of choosing gas providers. Queries emailed to Indraprastha Gas Ltd, Mahanagar Gas Ltd and Gujarat Gas Ltd remained unanswered.

“In places like Delhi, marketing exclusivity has already ended, but it (gas distribution) has not yet been opened up, and previous efforts to open up the sector have been challenged legally. The regulator will have to bring the regulation with a balance as it would be difficult to ask new players to focus on regions with less demand," said Prashant