The Petroleum and Natural Gas Regulatory Board (PNGRB) is set to amend its definition of piped natural gas (PNG). This decision comes amidst objections from various city gas companies. The aim is to clarify the regulations surrounding the supply of natural gas and encourage the development of pipeline infrastructure.
Background of PNG Definition
In 2018, PNGRB expanded the definition of PNG to include “natural gas transported through pipelines or cascades or any other permitted mode”. This change was made to assure potential licensees that they could utilise cascades for their minimum work programme obligations. Many regions lack direct access to the national gas grid.
Current Amendment Proposal
PNGRB plans to remove “cascades or any other permitted mode” from the PNG definition. This move seeks to reinforce the requirement for city gas companies to primarily use pipelines for gas distribution. The intention is to eliminate reliance on cascades, which have been a common alternative.
Legal Implications
A recent court ruling supported a city gas licensee’s argument that exclusivity rights for gas supply applied even when using cascades. PNGRB’s amendment aims to counter this ruling. By redefining PNG, the board seeks to clarify that exclusivity is tied only to pipeline usage.
Industry Reactions
Indian Oil Corporation expressed concerns that the removal of “cascades” could hinder the work programme targets of city gas companies. In contrast, Reliance Industries supports the proposed changes, seeing them as beneficial for regulatory clarity. Adani Total Gas Ltd raised concerns about potential infringements on the exclusivity rights of city gas distributors.
Impact on City Gas Companies
The proposed amendment may impact how city gas companies operate. With a focus on pipeline infrastructure, companies will need to adapt their strategies. The exclusivity rights for supplying gas to consumers with a demand of up to 50,000 standard cubic meters per day will be strictly enforced under the new definition.
Questions for UPSC:
- Examine the implications of the proposed changes to the definition of piped natural gas by the Petroleum and Natural Gas Regulatory Board.
- Discuss the potential impacts of the PNGRB’s amendment on city gas distribution companies.
- Critically discuss the legal challenges faced by the Petroleum and Natural Gas Regulatory Board regarding the exclusivity rights of city gas licensees.
- With suitable examples, analyse how the removal of “cascades” from the PNG definition could affect natural gas supply in less connected regions.
