 "Mahanagar Gas legally challenges infrastructure exclusivity expiry notice")
City-gas distributor (CGD) Mahanagar Gas has legally challenged a regulatory notice about the expiry of the company’s infrastructure exclusivity in Mumbai, the company said. However, Mahanagar Gas (MGL) and the country’s petroleum and natural-gas regulator are aiming to settle the matter amicably.
Mahanagar Gas also looks to apply for a 10-year extension to continue its infrastructure exclusivity.
In a public notice on March 4, the Petroleum and Natural Gas Regulatory Board (PNGRB) said the infrastructure exclusivity granted to geographical areas in Mumbai and Greater Mumbai has expired. The end of the period for the stated exclusivity was mentioned as April 2021 – a move seen as a first and a surprise by the industry.
“The company has challenged the public notice dated 4th March 2024 of PNGRB before the Delhi High Court,” Mahanagar Gas said in a response to Business Standard this week. The company said the matter is currently pending, however, “On March 14, the court was informed by both parties that they are exploring to settle the matter amicably.”
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In its response, MGL said it will be applying for an extension of 10 years as provided under the regulations.
If the infrastructure exclusivity were to expire, it would mean MGL can continue to lay and build infrastructure, subject to specific approval from the PNGRB, any other entity can also lay, build, expand and operate its natural gas distribution network in the same geography.
The city-gas company does not expect the notice to practically have any implications on its business in the short or medium term. “Even from a long-term point of view, MGL has a vast and depreciated network, and any new operator will find it very difficult to lay an economically viable parallel network at current costs.”