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City Gas Distribution-I: The model will have to undergo a make over
Aug 14: City Gas Distribution (CGD) companies are showing a rapid increase in CNG sales driven by the rather artificial divide between low gas prices juxtaposed against market-driven competing fuel prices.
8The robustness in the growth of the CNG segment will be in doubt going forward as demand for gas increases with more CGD companies developing their footprints on the ground juxtaposed against declining production of cheap gas from ONGC and OIL's nomination fields.
8Piped natural gas volumes are only a fraction of CNG sales, and within this segment, the commercial and industrial sectors in which the price of gas is market determined is even smaller.
8As prices standardize, the CGD model will have to undergo a dramatic change.
8As new CGD owners emerge, it will be a big mistake if their business plans are going to be modeled along the lines of existing CGD players.
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