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Do PNGRB’s unified tariffs & open access regulations limit new competition? Find out

Updated : November 27, 2020 13:04:02 IST

Indraprastha Gas (IGL) shares jumped more than 14 percent to Rs 514 in early trade on Friday after the oil and gas regulator Petroleum and Natural Gas Regulatory Board (PNGRB) notified regulations for a unified gas transmission tariff structure.

Speaking to CNBC-TV18, AK Jana, MD of Indraprastha Gas said that PNGRB agreeing to their recommendations on unified tariffs is a positive. “It is good for all the existing entities. They would be able to maintain their own business at the same level,” he said.

However, according to Jana, whether oil marketing companies (OMCs) can set up their own dispensers once agreement with city gas distribution (CGD) ends is a grey area.

“This is a grey area but the fact is that one is infrastructure and second is agreement. As long as infrastructure has been created for 25 years and the marketing exclusivity has not been terminated for existing CNG, we will have to extend the agreement and the terms and conditions should be agreed mutually by both. It will be breach of this regulation if they are not honoring this particular agreement for extension and they would be asking to stop the CNG stations and subsequently they will be setting up their own CNG stations over there. I think that is not the intent of this regulation. So, we will work with PNGRB to bring more clarity on that particular aspect,” he said.

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