Competition is expected to eventually emerge in the city gas sector

21 Nov 2023

Consumers may soon have the freedom to choose between different providers of piped natural gas (PNG) and compressed natural gas (CNG) fuel stations in different markets. This marks a change in the current scenario where single operators have dominated without facing competition, as per a report. In an important move, regulatory changes are on the horizon for the city gas sector in India. Currently, operators enjoy infrastructure exclusivity, giving them exclusive rights to use existing pipelines and infrastructure, as well as the right to establish new facilities in specified areas. Moreover, marketing exclusivity allows sole rights for marketing and selling of compressed natural gas (CNG) and piped natural gas (PNG) in allocated areas, with varying exclusivity periods in the licenses, 25 years for infrastructure and eight years for marketing.

The initiative, aimed at breaking the dominance of single natural gas operators, follows a previous attempt in fiscal year 2021, which faced opposition from incumbents. The potential resistance to this new plan depends on its success. If implemented, consumers would benefit from having the ability to choose from multiple gas providers.