ICICI Securities: Gas Sector Outlook - PNGRB Deliberations Delay Reforms; Likely By December 2020 At The Latest
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ICICI Securities Report
Petroleum and Natural Gas Regulatory Board (PNGRB) member Mr Satpal Garg in a recent interview indicated that:
1. PNGRB is exploring whether the PNGRB Act allows it to fix unified tariff for connected pipelines of multiple entities;
2. if fixing one integrated tariff for connected pipelines of multiple entities is not immediately possible, it will fix separate integrated tariff for each entity in phase I and one tariff for all entities in phase II;
3. notification of regulations allowing competition in city gas distributors has been delayed as PNGRB is deliberating on fixing eligibility criteria, how to ensure focus not just on compressed natural gas and the basis for incumbents to charge tariff for use of its network by new entrants.
Unified tariff and regulation allowing competition in CGD is likely by December 2020, when the first phase of Jagdishpur-Haldia and Bokaro-Dhamra (JHBD) pipeline is scheduled to be commissioned and the term of the chairman of PNGRB expires.
Indraprastha Gas Ltd. and Mahanagar Gas Ltd. would be more hit by competition than Gujarat Gas Ltd.
Unified tariff would help boost JHBDPL’s utilisation but GAIL India Ltd.’s tariff rise is more likely from reforms PNGRB next plans to focus on.
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