GAIL Challenges PNGRB's Unbundling Directive in Delhi High Court
GAIL moves court against PNGRB over unbundling plan
The Economic TimesImage: The Economic Times
GAIL (India) Limited has filed a petition against the Petroleum and Natural Gas Regulatory Board (PNGRB) in the Delhi High Court, contesting the regulator's push for unbundling gas transportation and marketing activities. GAIL argues that the separation threatens its integrated business model and that the Indian gas market is not mature enough for such reforms.
- 01GAIL has resisted PNGRB's unbundling plan, citing threats to its integrated business model.
- 02The PNGRB's push for unbundling follows a report by a committee led by Ajay Tyagi.
- 03GAIL operates about 16,000 km of India's 25,000 km pipeline network, holding a dominant market share.
- 04The unbundling reform was mandated in 2017 but remains unimplemented.
- 05GAIL argues that a forced split could weaken both transportation and marketing sectors.
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GAIL (India) Limited has escalated its long-standing dispute with the Petroleum and Natural Gas Regulatory Board (PNGRB) by filing a petition in the Delhi High Court against the regulator's unbundling directive. This directive, which mandates separating gas transportation from marketing activities, was originally proposed in 2017 but has yet to be implemented. GAIL contends that unbundling threatens its integrated business model, which has been built on its extensive pipeline network of approximately 16,000 km, constituting 59% of India's authorized pipeline infrastructure. The company argues that the Indian gas market is still evolving and not ready for such a split, claiming that it could weaken both sectors and benefit private players at the expense of public sector undertakings. The PNGRB, frustrated with GAIL's resistance, has received backing from a committee report led by Ajay Tyagi, which emphasizes the need for reform in the now-mature market. The ongoing legal battle highlights the tensions between a state-run entity and its regulatory body over the future structure of India's gas market.
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The outcome of this legal battle could significantly affect the structure of the gas market in India, potentially impacting gas prices and availability for consumers.
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