Oil ministry draft rules give boost to CGD companies
In the draft rules, the oil ministry says that none of the companies will be able to sell compressed natural gas (CNG) and piped natural gas (PNG) in the authorised areas unless they have a license, that is without the permission of central government. That would mean that the competition will only be limited to the commercial and also the industrial segment.
The Ministry of Petroleum and Natural Gas has come out with draft rules, which majorly talks about the extra competition that the city gas distribution (CGD) companies would have faced.
According to the Petroleum and Natural Gas Regulatory Board (PNGRB) rules, more competition had been allowed which would have hurt around 20 percent of volumes for the CGD companies.
Now in the draft rules, the oil ministry says that none of the companies will be able to sell compressed natural gas (CNG) and piped natural gas (PNG) in the authorised areas unless they have a license, that is without the permission of central government. That would mean that the competition will only be limited to the commercial and also the industrial segment.
This would mean positive for all the CGD companies because they have a larger exposure to the CNG and PNG segment.
This also says that third parties cannot sell it even after they have been declared as a common carrier by the PNGRB. So, they are putting some limitations in place out here and if this becomes final, it would be very positive for all these companies because the competition will be lower.
Additionally, PNGRB has come out with a note where it is seeking stakeholders’ view on the supply of natural gas including liquefied natural gas (LNG) in various geographical areas with regard to the setting up of LNG firms.
The third and the most important point is that they talk about the interpretation of exclusivity in the CGD network.
Indraprastha Gas Ltd (IGL) had gone to the court and questioned the definition of exclusivity. So now PNGRB has taken it up and are going to discuss it. If there is anything positive that comes out of it in favour of IGL, it will boost the stock as well.
Watch the accompanying video for more details.
(Edited by : Dipika)
First Published: Jul 1, 2021 11:47 AM IST
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
Punjab Lok Sabha elections: Check full list of AAP candidates and constituencies
May 18, 2024 12:59 PM
PM Modi, Rahul Gandhi election rallies in Delhi today: Here are the routes to avoid
May 18, 2024 11:28 AM