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New business model for CNG stations

The government last week launched the Dealer Owned Dealer Operated (DODO) model for setting up CNG stations on the sidelines of Petrotech 2019.

The Minister of Petroleum and Natural Gas & Skill Development and Entrepreneurship, Dharmendra Pradhan, released the general guidelines for the schemes, under which the entire earmarked dealer plot shall be developed exclusively for setting up of CNG station and allied commercial activities at the discretion of CGD (City Gas Distribution) activities.

Under the scheme, 87 Geographical areas serviced by 23 entities authorised will be covered. Under the 9th round of CGD bidding, more than 4600 new CNG stations are expected across India in next 8 years. The ongoing 10th round of CGD bidding envisages to cover 50 geographical areas covering 124 districts spread over 14 states, accounting for 24 percent of India’s area and 18 percent of its population.

After 10thbidding round, 53 percent of the country’s area and 70 percent of its population will have access to CGD networks. As more and more CNG stations come up, more than 10 percent CNG stations may be based on DODO model.

Pradhan said that, the country is moving towards the gas economy, as this fuel is cheaper and less polluting. The PNGRB (Petroleum and Natural Gas Regulatory board) has undertaken an unprecedented expansion of CGD network, and this will lead to laying of more gas pipelines, increased production and availability of the gas, and also last mile connectivity of the infrastructure to provide CNG and PNG to the consumers. He called upon the investors and private players to participate in the growth of the gas based economy by using the opportunity provided through DODO.

CNG vehicles are not only more eco-friendly when compared to their petrol and diesel-powered counterparts but they also have a lower cost/km. Plus, rising fuel prices could hopefully prompt entry-level car customers to move to CNG.  AutoCar

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