(FE)
The country’s oil marketing companies Indian Oil Corporation (IOC), Bharat Petroleum Corporation and Hindustan Petroleum Corporation, state-run gas marketer GAIL India, private player Adani Group and incumbent Indraprastha Gas (IGL) put in the bids for city gas distribution (CGD) licences as 86 permits for selling compressed natural gas (CNG) and piped cooking gas in 174 districts in 22 states and union territories went under the hammer on Tuesday. However, after showing interest in the bidding process, the Reliance Industries-BP combine is learnt to have dropped out of the race at the last moment.
More than 400 bids have been received for 86 geographical areas (GAs) offered in the ninth CGD licensing round. These GAs will cover 24% of India’s area and 29% of the country’s population. In other words, they cover 174 districts across 22 states and union territories. Currently, 91 GAs with 24% of the population have piped natural gas (PNG) facility. A licence winner under the CGD round will have the exclusive right to offer PNG and CNG in a particular GA for eight years, extendable by two years.
Adani Gas bid for 32 cities on its own and another 20 cities in an equal joint venture with state-owned IOC. Quoting unnamed sources, the agency also reported that IGL, which retails CNG in the national capital region, put in bids for 13 cities, and Essel Infraprojects put in a total of seven bids. The market share of OMCs in fuel retailing could shrink over time in case they do not get into CGD. “LPG (liquefied petroleum gas) competes with PNG and availability of CNG affects demand for petrol and diesel. That is why they (OMCs) would want to offer these services,” said a source. The three OMCs together control around 95% of the fuel retailing business in the country.
