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City gas distribution: Not an easy road ahead
Aug 10: The city gas distribution business may have elicited a good response from big players
8But ground realities are are going to be tough
8If subsidized gas is not supplied to the CGD players, a large segment of its business comes under strain. Eventually low priced gas will run out of the system.
8As liquid fuel quality improves or electric cars take over, the case for CNG will weaken considerably.
8The industrial segment is extremely price sensitive and it is always a battle for market share with competing liquid fuels
8In this context, only a certain set of companies seems keen to get into the CGD segment.
8Reliance has stayed out, not just of CGD but also from the exploration rounds. Clearly it does not see enough traction. Shell's partial disinvestment in MGL means that the glass can be either half full or half empty, depending upon the perspective.
8Pertinently however, gas suppliers will be left depending upon the CGD segment to boost demand as power and fertilizer companies will be unable to do so
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