GAIL India unlikely to meet even 50% of PNG addition target for FY18

GAIL India Ltd, the country’s primary gas pipeline company, is unlikely to meet even 50% of its targeted piped natural gas (PNG) customer addition in the ongoing financial year.

According to numbers provided by the ministry of petroleum and natural gas, GAIL has been able to add only 4.12 lakh PNG connections this year as of Feb 21.

On the other hand, the company had signed a memorandum of understanding with the government that it would connect 10 lakh households to its pipeline network this year.

It is also likely to miss its CNG filling station targets as well.

According to the MoU, the government-controlled company was supposed to add 120 new CNG filling stations this year. However, as of Feb 21, it has added only 64 CNG stations.

The government had expected capital expenditure of Rs 3,400 cr in PNG and CNG segments in India this financial year. However, in the first nine months, only Rs 1308 cr has been spent.

For the next year, said the oil ministry, the government has set a target of Rs 4,130 cr.

Meanwhile, it said, the Petroleum and Natural Gas Regulatory Board has identified 86 new areas for the development of city gas networks.

GAIL used to be largely a trunk gas pipeline company, transporting gas from one part of the country to another. It has a 75% market share in gas transmission in India, and a share of 50% in gas trading.

In recent years, GAIL has diversified into city gas distribution as well.

The company has over 11,000 Kms of natural gas network and plans to expand it to 16,000 km by 2020.

The supply of cooking gas in India is primarily through pressurized cylinders, which increases the cost and is considered more dangerous than piped supply.