RIL, Essar Oil, ONGC, Torrent in race for CNG retailing permit

RIL, Essar Oil, ONGC, Torrent in race for CNG retailing permit

Reliance Industries Ltd (RIL), Essar Oil Ltd, Oil and Natural Gas Corp. Ltd (ONGC) and Torrent Power Ltd are among companies planning to bid for the ninth round of city gas distribution (CGD), two people aware of the matter said.

The Petroleum and Natural Gas Regulatory Board (PNGRB) will offer compressed natural gas (CNG) retailing licences in 100 cities shortly. RIL, Essar Oil and ONGC did not respond to emails sent on 15 March.

The PNGRB has so far held eight rounds of bidding. The last few rounds of CGD bidding had seen lukewarm response.

This time, PNGRB is looking at a new model with a different bidding parameter. Last October, the regulatory body had called for industry comments on an alternative model of bidding criteria for CGD. “To encourage wider participation, PNGRB has proposed to increase the exclusivity period and has pruned the minimum net worth criteria for bidders. This will encourage players to bid,” said a CGD consultant on condition of anonymity.

Firms with a net worth of not less than ₹150 crore can bid for cities with 5 million people, and those with ₹100 crore net worth can bid for cities with 2-5 million people. A ₹5 crore net worth firm can bid for cities with less than 1 million people. Firms which win CGD licence for a city will have eight years of marketing exclusivity, against the existing five years. Also, entities with experience of at least one year in operation and maintenance of a CGD network and with adequate number of technically qualified personnel would meet the eligibility criteria for bidding.

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