Even as the Petroleum and Natural Gas Regulatory Board (PNGRB) is gearing up to open bids for opening CNG stations in 14 cities across the country, the Petroleum and Natural Gas Ministry has put paid to its plans by suggesting that oil regulator’s approval was not needed for setting up CNG outlets.

“CNG station is not covered in the definition of city or local natural gas distribution network provided in the PNGRB Act, 2006. No authorisation from PNGRB is required for setting up of a CNG station,’’ the Ministry said in a letter to GAIL India Ltd chairman and managing director, B.C. Tripathi. This stand of the Ministry clearly indicates that PNGRB is authorised only to give license for laying of piped city gas or city gas distribution (CDG) network but any organisation was free to open up a CNG outlet after fulfilling the necessary conditions.

GAIL India had sought a clarification from the Ministry asking if PNGRB the CDG and CNG networks were at par with each other as far as PNGRB terms and law is concerned. “The issue was examined in the Ministry in consultation with the Department of Legal Affairs, Ministry of Law and Justice,’’ the Ministry said. The Minister for State for Petroleum and Natural Gas, Panabaaka Lakshmi also informed the Parliament that CNG stations can be established by any entity without authorisation from the PNGRB.

PNGRB has been since 2009 issuing licences to entities for city gas distribution (CGD) networks, essentially for retailing compressed natural gas (CNG) to automobiles and piped cooking gas (piped natural gas or PNG) to households. However, the Ministry has made it clear that PNGRB has the final authority for issuing licenses for CDG network.

The PNGRB which had in October invited bids for issuing licenses for retailing CNG and piped cooking gas in 14 cities including Bengaluru, Pune and Amritsar. Bids are due on February 11, 2014. GAIL Gas Ltd, a subsidiary of state-owned GAIL India Ltd, had walked away with four of the six cities offered in first round of CGD bidding in 2009. It won Sonepat in Haryana, Dewas in Madhya Pradesh, Meerut in Uttar Pradesh and Kota in Rajasthan while Bhagyanagar Gas Ltd got Kakinada in Andhra Pradesh and DSM Infratech Mathura in Uttar Pradesh.

More In: Industry | Business