Setback to Reliance, city gas network to be monopoly projectsadmin
In a major setback to Reliance Industries, the government has decided to allow companies have monopoly in city gas distribution (CGD) projects to sell natural gas to households and automobiles.
“CGD projects will have marketing exclusivity. A company or consortia granted CGD license for a particular city will have marketing exclusivity for a certain number of years,” a senior Petroleum Ministry official said.
Reliance, which plans to enter CGD business by 2008, had demanded that no marketing exclusivity should be allowed in consumer interest.
The official said the period of exclusivity would depend upon the investment made by the companies in CGD projects and would be determined by the regulator, who is likely to be in place before the fiscal end.
RIL’s demand was supported by the Planning Commission but state oil firms and global energy majors British Gas (BG) and British Petroleum (BP) had demanded exclusivity.
“Majority of the countries the world over give exclusivity to CGD projects,” the official said.
Industry sources said Reliance wanted to use the vast natural gas reserves found in its D6 block in Krishna Godavari basin for CGD networks across major cities, majority of which already have or would shortly have a city gas retailer.
There was also a demand to declare existing CGD networks, including pipelines in Delhi and Mumbai, as common carriers so as to allow new entrants access to them.