Adani quotes zero tariff; win CNG rights for two cities

Indian Oil Corp and Adani Energy combine has bagged rights to retail CNG to automobiles and piped gas to industries in Chandigarh and Allahabad by quoting a nil or zero pipeline tariff.

Petroleum and Natural Gas Regulatory Board (PNGRB) had asked the companies to quote only the tariff that they will charge for transporting gas within the perimeters of a city and left the final selling price of the fuel for the companies to decide.

This provision of 'zero' tariff, sources said, is made up by companies through CNG charges levied from users - household or industries - as they deem fit.

Industry sources said PNGRB today opened price bids for two cities to discover that IOC-Adani combine had quoted zero pipeline tariff for 25 years in Chandigarh and the same for 7 years in Allahabad.

On top of this, the PNGRB has also allowed a 5-year marketing exclusivity to the winning company.

Even after 5 years, the operator like IOC-Adani will have system (that is pipeline) exclusivity for 25 years, meaning no other company can lay a pipeline network and would have to necessarily request them to use their network if they want to retail CNG to automobiles and piped gas.

But the regulations do not specify the extra capacity the operators would have to create in the system for usage by others and so third parties can be turned down on pretext of no capacity, they said.