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Oil sector regulator PNGRB has given up to eight-and-a-half months of extra time to companies such as Indian Oil Corporation (IOC), GAIL and Adani Gas to fulfil their city gas project rollout commitments that had been impacted by COVID-19 lockdowns.
On November 5, the Petroleum and Natural Gas Regulatory Board (PNGRB) issued an order granting more time to 41 city gas entities to complete their rollout commitment.The time granted varies from 129 days to 251 days across different geographical areas depending on the duration of the COVID-19 lockdown, the order said.
The extra time is to make up for 69 days of the national lockdown imposed to curb the spread of the pandemic and additional restrictions imposed in states. A 60-day restoration period is given on top of the lockdown period.
PNGRB said it has given licences to retail CNG to automobiles and piped natural gas to household kitchens and industries in 230 geographical areas (GAs) across the country.A geographical area is made up of one or more districts.
“However, in recent times, the entities have been facing a catastrophic situation due to the outbreak and the spread of COVID-19, a pandemic declared by the World Health Organization (WHO) that has affected every sector across the globe, including the city gas distribution (CGD) business,” it said.
This resulted in CGD entities unable to perform their obligations.The regulator listed the pandemic as a condition for force majeure that entitles entities for extra time.
IOC, GAIL India Ltd, Adani Gas, Gujarat Gas, Torrent Gas, Bharat Petroleum Corp Ltd (BPCL), Indraprastha Gas Ltd and Hindustan Petroleum Corp Ltd (HPCL) are among the firms that got extra time.
PNGRB said it has “approved the extension considering the national lockdown by Government of India (69 days), additional lockdown/restrictions imposed by state governments or by district authorities and a restoration period of 60 days”.
The board granted such extension to 41 CGD entities in respect of 185 GAs that have been considered eligible for force majeure extension on account of COVID-19.”The decision of the board in this regard shall be final and binding on the entity,” it added.
Earlier in September, PNGRB issued a fresh set of force majeure guidelines, listing events such as riots, natural disasters and restrictions by the government as conditions for allowing more time to complete city gas rollout obligations.
PNGRB gives out city gas licence to retail CNG to automobiles and piped cooking gas to households on the basis of committed work programme like laying of gas pipelines and setting up CNG dispensing stations.The guidelines came after a nationwide lockdown to contain the spread of COVID-19 from March 25 and state-level lockdowns since June hampered city gas projects.
Several city gas firms claimed force majeure after work on sites got stalled due to lockdown. Such claims, however, were not immediately accepted in absence of guidelines listing events that can trigger force majeure.
Force majeure refers to a clause that is included in contracts to remove liability for natural and unavoidable catastrophes that interrupt the expected course of events and prevent participants from fulfilling obligations.