The Indian Prime Minister recently laid the groundwork for the ninth round of the City Gas Distribution (CGD) project. The Indian Government is enthusiastically endorsing the use of environmentally sustainable clean fuel throughout the country, symbolising a leap towards a gas-based economy. Currently, the share of gas in India’s energy mix stands slightly over 6%, while the global average is 24%. The Indian Government aims to increase this figure to 15% by developing CGD networks nationwide. The primary purpose of these networks is to improve the availability of cleaner cooking fuel (Piped Natural Gas) and transportation fuel (Compressed Natural Gas) in India.
The Petroleum and Natural Gas Regulatory Board (PNGRB) Initiatives
In helping to achieve this objective, the Petroleum and Natural Gas Regulatory Board (PNGRB) has kick-started a new CGD bidding round. The latest round will cover 124 districts across 14 states, thereby potentially increasing coverage to about 53% of India’s geographical area and 70% of its population.
Government’s Clean Energy Initiatives
The CGD project is a significant step to support and enhance various clean energy initiatives by the Union Government. These initiatives include Ethanol Blending, Compressed Biogas plants, increased LPG coverage, and the introduction of BS-6 fuels for automobiles. Additionally, the CGD project will bolster the Pradhan Mantri Ujjwala Yojana, as the number of cylinders can be vacated for delivery in rural areas due to piped gas deliveries in cities.
Significance of the Scheme
Natural gas, being environmentally friendly, safer, and cheaper, is intrinsically a superior fuel when compared to coal and other liquid fuels. It plays a pivotal role in reducing air pollution, aiding India in its commitment at COP21 Paris Convention in December 2015 to reduce carbon emissions by 33% of 2005 levels by 2030.
| City | PM 2.5 concentration |
|---|---|
| Delhi | 143 μg/m³ |
| Mumbai | 64 μg/m³ |
| Kolkata | 63 μg/m³ |
Economic and Practical Value of Natural Gas
Natural gas, in the form of Compressed Natural Gas (CNG), is 60% cheaper than petrol and 45% cheaper than diesel. Moreover, Piped Natural Gas (PNG) is approximately 40% less expensive than market-priced LPG and nearly matching the cost of subsidised LPG in Delhi.
Job Creation Potential
The establishment of gas networks in various cities opens doors for growth in gas-based industries, thereby providing employment opportunities to the youth.
Advantages Over Cylindered Gas Supply
Natural Gas supplied through pipelines, similar to tap water, eliminates the need for storing cylinders in kitchens, thus saving space. It also assures constant supply, making it more efficient than cylindered gas.
Challenges and the Way Forward
Despite these advantages, transitioning to a gas-based economy faces several hurdles, such as meeting demands of gas, pricing issues, and infrastructure requirements. However, solutions like long term contracts for Liquefied Natural Gas (LNG) with exporting nations can help address these demand-supply constraints.
The Role of PNGRB
The Petroleum and Natural Gas Regulatory Board (PNGRB), established under the Petroleum and Natural Gas Regulatory Board Act, 2006, serves a crucial role in the process. It aims to protect consumers’ interests and promote competitive markets relating to petroleum, petroleum products, and natural gas. The PNGRB authorises CGD networks, natural gas, and petroleum product pipelines, sets tariffs, and lays down the technical and safety standards.
Last Modified: February 6, 2024