CNG Ordinance likely this month

Move expected to expedite conversion of vehicles to CNG

In an effort to put an end to the controversy over rights of distribution and sale of compressed natural gas, the state government has decided to promulgate a CNG Ordinance this month.

"The government has decided to come out with a CNG Ordinance by end of this month which would clarify all confusions," said minister of state for energy, petrochemicals, Saurabh Dalal.

"We have also announced the decision to convert petrol/ diesel driven vehicles to CNG and the proposed Ordinance would help us to expedite such conversions," he added.

The Ordinance has been delayed by over a year owing to the controversies relating to the Gujarat Gas (Regulation of Transmission, Supply and Distribution) Act in 2001.

In 2001, the Gujarat government passed the Gujarat Gas Act, 2001. The state empowered itself to regulate transmission, supply and distribution of gas, as well as promote the gas industry, lay pipelines etc.

The Act also created a regulatory authority with powers to impose fines and imprisonment and the exclusive right to issue licences. Subsequently the Supreme Court intervened and called the Act void.

Meanwhile, Union petroleum minister Mani Shankar Aiyar has referred the draft Petroleum & Natural Gas Regulatory Bill to the Group of Ministers (GoM) and the Bill is not expected to be tabled during the ongoing winter session of the Parliament.

The controversy relating to the sale and distribution of CNG started with the government "" which had assured companies licensed to distribute and lay CNG networks that it would not allow multiple players in one city/town "" now licensing a second player in major CNG markets like Ahmedabad.

The state also decided that only Gujarat State Petronet Limited (GSPL) would be allowed to put CNG pipelines, which irked major gas carriers like Gail India.

To make the situation worse, GSPL has initiated talks with Indian Oil Corporation (IOC) for laying pipelines as part of the proposed Dahej-Uran gas pipeline within the geographical limit of Gujarat even as Gail had earlier announced its intention to lay pipelines for the entire stretch.

"The Gujarat government, which had once burnt its fingers with the Gujarat Gas Act, 2001, now wants to at least make a policy framework available for the CNG sector," said a source close to one of the major oil PSUs having significant investments in the state.

"Though GoG officials had planned to come out with the CNG Act at least a year back, things did not move much. With recent developments over rights of CNG distribution, the government has decided to come out with the Ordinance," he added.

In October 2003, state government officials had talked about a CNG Act to be introduced during early 2004 which, however, never happened.

In February this year, the government decided to constitute a working group for finalising the proposed CNG Act. With the CNG Ordinance, it would first such Ordinance/Act passed by any state government in the country.