Oil regulator for covering CNG networks under infrastructure lending

Oil regulator Petroleum and Natural Gas Regulatory Board (PNGRB) has asked that Reserve Bank of India (RBI) cover networks for sale of CNG to automobiles and piped gas to households under the definition of infrastructure so they may be able to avail project financing.

Currently RBI guidelines for infrastructure lending cover only gas, crude oil and petroleum product pipelines.

PNGRB chairman L Mansingh wrote this week to the RBI governor D Subbarao for inclusion of city gas distribution (CGD) networks under the scope of Infrastructure Lending.

"CGD networks should be considered as an integral part of the infrastructure facility for reaching natural gas to the bulk of consumers in the domestic, transportation, commercial and industrial sectors," he wrote on 4January.

He added that unlike petroleum and other products, natural gas can mainly be transported and distributed through pipelines and CGD networks only.

"I would request you to kindly include specifically city gas distribution networks in the guidelines for infrastructural lending in order to facilitate the flow of credit to this sector and speedy implementation of the projects." he wrote explaining that setting up CGD networks requires massive capital outlay.

He said that PNGRB proposed to roll out CGD networks across the country in batches of 7-8 Geographical Areas (GAs), decided on the basis of likely availability of gas, per bidding round.

"It is expected that along with the existing CGD networks, 125 GAs would be covered in 3-years with the number increasing to 250 in 5 years."