Deora gives final touches to city gas policy

The Government is likely to allow companies to have monopoly in retailing natural gas to households and CNG.

Petroleum Minister Murli Deora on Tuesday gave final touches to the policy for laying natural gas pipelines and setting up city gas distribution networks with a view to protect consumer interest and assure adequate returns to investors.

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The Government is likely to allow companies to have monopoly in retailing natural gas to households and CNG to automobiles for a 'limited period', which would be decided on the basis of investment made, location and market growth.

Under the Natural Gas Pipeline and City or Local Natural Gas Distribution Networks policy the exclusivity period for city gas distribution networks may vary between 3-5 years, official sources said.

When contacted, Deora said he has held another round of consultations with stakeholders including the Planning Commission and private firms like RIL and RNRL on the policy.

"We are in the process of finalising the policy that will give priority to consumer interest, assure investors of adequate return in investment and provide stable regulatory framework," he said.

Sources said the policy wants firms to commit long term investments based on reasonable return through network tariff, along with some incentive for earning profit from gas sales through a limited period of marketing exclusivity.

Exclusivity would be granted for transaction of volumes below a pre-determined threshold in a transparent manner, sources said, adding the downstream oil regulator will decide on the period of exclusivity based on investments made, location and market growth.