PNGRB Munificence, Yes, most will have to give acquiescence that the Petroleum and Natural Gas Regulatory Board (PNGRB)’s approval for development of 1800 KMs of LPG Pipeline in Southern and Western India is a god send but is it really so? The secret is in the fine print. Experts opine that LPG is not a very profitable business and in India Oil PSUs are ‘burdened’ with the task of ensuring its availability on a cross-country basis. The Oil PSUs in turn carry out the business on assurance of subsidy compensation by the Govt. of India (for the under recoveries).
The scarcity of LPG pursuant to the Gulf War between Iran, United States and Israel having choked the Strait of Hormuz on which India & many other Asian countries depended, the situation has taken an alarming turn. All this is known to the common public through the wide publicity given by the mainstream media houses. But what is perhaps carefully camouflaged is the dynamics of LPG business including pricing.
Touted as one of the ideal Cooking Fuels along with Piped LNG, it is now, not only a product of mass consumption in the households of India but is a politically sensitive issue as well. The Pradhan Mantri Ujjawala Yojana has also contributed, by no small means, to its popularity. All this is actually very good but the economic & business subtleties are often glossed over. Interestingly, after the Oil & Gas Sector opened up, the Private Players reaped bounties on Liquid Fuels, even during the Gulf War but when it came to LPG they had trepidations. The LPG consumers are also now all too aware of how its availability (or Lack of it) impacted their kitchens. So, the latest announcement by PNGRB should be welcome indeed! Alas it comes with some deep-seated concerns.
The PNGRB approval is essentially regarding the development of around 1,800km of LPG pipelines across Telangana, Maharashtra, Uttar Pradesh, Uttarakhand, Karnataka and Goa, aimed at helping reduction of movement of LPG tankers by road and strengthening supply security. It involves an estimated investment of Rs 7,000 crore, the three pipelines – Cherlapally in Telangana to Nagpur in Maharashtra (556km), Jhansi in Uttar Pradesh to Sitarganj in Uttarakhand (611km), and Shikrapur in Maharashtra to Goa and Hubli in Karnataka (633km). It is to be developed by GAIL (India) and SAIL would supply the Pipelines.
When completed, the PNGRB-authorised common carrier LPG pipeline network will expand from around 7,700km to 9,500km. India imports a large part of its LPG requirement. Supplies arrive mainly at coastal locations and then are transported to consumption centres across the country. PNGRB stated that expanding the pipeline network would reduce dependence on road transportation, lower logistics costs, ease traffic congestion and improve road safety. The move comes also on the back of a series of road accidents involving LPG tankers. PNGRB is therefore pushing for the elimination of primary movement of LPG by road to bottling plants. These with Line Pack Storage and continuous movement of LPG is going to be useful especially during emergencies and high demands. All this appears to be indeed compulsive reasons for PNGRB to have given its approval for the Projects. But one also need to look at certain facts that the entire LPG business is confronted with.
Those in the know claim that LPG has never been the apple of the eye business for OMCs. Production and Marketing of Liquid fuels give far greater returns. Of course, the Indian scenario is primarily warped. The Costs sometimes far outweigh the Sale Prices which are kept at an artificial low. The Government claims that it does not dictate pump prices, however the public by now is aware that it’s a bit of a fib. A cursory glance at the Financial Performance of Oil PSUs vis a vis the Private Players, in 1st quarter of 2026, will drive home the point.
HPCL (Hindustan Petroleum Corporation): Reported a massive consolidated net loss of ₹12,265 crore on a revenue of ₹1,45,126 crore, hit by high input costs and LPG under-recoveries.
BPCL (Bharat Petroleum Corporation): Posted a consolidated net loss of ₹1,873 crore (and a standalone loss of ₹3,962 crore).
IOCL (Indian Oil Corporation): Recorded a standalone net loss of ₹2,661 crore against a backdrop of rising crude prices and inventory losses.
Factors behind this abysmal performance is said to be Crude Price Volatility and Unchanged Retail Prices.
While RIL in the first quarter of fiscal year 2027 (Q1 FY27, ending June 30, posted strong revenue growth driven by elevated oil prices. Total Revenue: Surged 25% year-over-year to ₹3.11 lakh crore, boosted by strong momentum across businesses and higher global oil prices. Net Profit: Stood at ₹20,946 crore, Oil & Gas Segment Revenue increased 3.2% year-over-year to ₹6,298 crore. Nayara Energy another big private player is also reported to be doing well. Detailed quarterly financial profit and revenue numbers for unlisted private entities like Nayara Energy are typically not publicly disclosed in standard quarterly earning declarations.
Definitely these are interesting reads. NewsIP, has always strived for an in-depth analysis of events as they unfurl. The fine prints of the PNGRB approval for the three Pipeline projects. Interestingly, the exact waiting time or date when GAIL (India) Ltd. had initially applied for the three LPG pipeline projects is not publicly specified and public reports do not disclose the duration of the pending application or review period. Observers who can read between the lines make their own conclusions.
That apart even a common citizen, who follows the Oil & Gas Sector is by now not intrigued that none of the Private Players are keen on investing in the Construction & Maintenance of Cross-Country Pipelines, nevertheless, PNGRB always gives approval for use of these Pipelines on Common Carrier Principle. The conclusion is not hard for them to derive. Even while PSUs consistently loose in LPG businesses and the GOI continues to subsidise it, Oil PSUs are always on the tenterhooks regarding full compensation. Experts also say that in order to encourage the private Oil & Gas players many concessions have been extended ostensively to open up the sector.
Today, many Capital Facilities which are being used on common user principle and JVs have eroded the first investor advantage which Oil & Gas PSUs had. These coupled with the restrictions (Pricing, Foreign Sales, Feed Stock Selling etc.) has severely impacted the once dominant Oil PSUs. Experts say that the Private Players are today not only an equal but have surpassed the Oil PSUs and are outplaying them in almost all areas of business.
The classical financial results of Oil PSUs in the first quarter and that of private players is proof enough, many say. Therefore, to keep nourishing them at the cost of Oil PSUs has to be carefully examined. Few events like the 2019 Epidemic and the never-ending Gulf War are but two events which tend to support the view that India should hedge its bets on both the sectors being equally strong. The tendency to became monopolies is very strong amongst private businesses and even the so called most liberal IT Sector is not free from this malaise. The IT, Telecom, Robotics, Chip Technology, AI, Supply Chain Maintenance etc. seem to point out that dependence on monopolies is fraught with peril. A zero-sum game is not one which should be aimed at.
The challenges with ideal Business and Nation Building interface does not come on its own it has to be ‘manufactured’. Economists warn that balancing high public debt and fiscal sustainability while navigating volatile energy and supply chain shocks is the most difficult macro-level economic challenge for any nation today. World Bank has also pointed out that ongoing geopolitical conflicts, energy shocks and shifting trade policies have made the balancing act harder than ever. Environmental Events, Regional Instability, Misinformation, Radicalization, Internal Strife; India is confronted with all of these today. Therefore, consolidation and not dissention is the imperative need. India has managed many difficulties before it will do now as well. It needs to keep its head on its shoulders and decide impartially. And as Poet, Nida Fazli said- Koshis bhi kar umiid bhi rakh rasta bhi chun phir is ke baad thora muqaddar talash kar.
