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GAIL's gripping hold on the government: Will RIL-BP entry make a difference this time around?
Feb 08: The entry of RIL-BP as a competitive supplier of gas in India can have a big impact only if the government plays along and brings about much needed reforms in this segment of the economy.
8Unless the stratified common carrier paradigm that underpins the midstream sector is unlocked, monopoly owners of the infrastructure are unlikely to allow for much progress.
8A case at point is a similar foray by Shell, which already has an LNG terminal in operation. The company is the largest global LNG player and yet in India, it remained stymied by lack of direct access to customers.
8With both BP and Shell actively involved in the Indian market, it is time for the government to break up GAIL into its marketing and transmission arms as a first step towards reforming the sector. The petroleum minister has been making noises about bringing about a change but so gripping is GAIL's hold on the government, and perhaps rightfully so, that change, if any, is going to come only in driblets. It is futile to expect the government to open up the sector in one striking move.
8Unlike Shell, RIL-BP has a bigger exposure to market and is likely to push the government on reforms
8The PNGRB, now under a no-nonsense boss, can play a bigger and more assertive role as well
8RIL thought it could break the monopolies in existence in the sector when it drew first gas in the KG basin. That attempt was unsuccesful.
8Let's see what happens this time around
Click on Reports to know more on what RIL-BP plans on this front


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