October 08, 2008

PNGR Board lays down gas retail rules

It is reported that Petroleum & Natural Gas Regulatory Board has laid down criteria for retailing compressed natural gas for vehicles and natural gas for households in cities.

The board said that city gas distribution projects in 250 odd cities will be awarded on the basis of network tariff, CNG compression charge, length of pipeline proposed to be laid and the number of households to be covered. At the time of the constitution of the Board, the oil ministry had transferred a number of applications of different entities pending with them for the development of CGD networks to the Board for necessary action.

Regulations specify the minimum eligibility criteria for an entity to participate in the bidding process. The statement has said that the open bidding is in respect to four parameters with different weightage:

1) Lowness of present value of unit network tariff over the economic life of the project at 40%

2) Lowness of present value of the compression charge for CNG over the economic life of the project at 10%

3) Highness of the present value of inch kilometer of steel pipelines proposed to be laid during the period of exclusivity in terms of exemption from the purview of the common carrier or contract carrier at 20%

4) Highness of present value of the number of domestic customers proposed to be connected by PNG during the period of exclusivity in terms of an exemption from the purview of common carrier or contract carrier at 30%

The regulations specify service conditions, quality of service standards, consequences of default and termination of authorization procedure. The regulations also specify the procedure to be followed while dealing with the entities which have been laying, building, operating or expanding CGD networks.