Gas Cos uses mobile refueling units to expand retail
Town gas distribution companies (CGDs) are looking to expand their retail business through Mobile Refueling Units (MRUs) as oil marketing companies are not backing down on commission cuts to let companies distribution companies use their premises to sell compressed natural gas (CNG). Distribution companies are also increasing their own presence of CNG.
Mumbai-based Mahanagar Gas Ltd (MGL) and Delhi-based Indraprastha Gas Ltd (IGL), among others, are piloting indra MRUs and have invited interest in establishing additional units.
“We have installed an MRU in Ajivali along the old Mumbai-Pune-Mumbai-Goa highway. The infrastructure has been put in place. The facility, however, is awaiting final regulatory clearance, “said a senior MGL official, adding that once the pilot project is successful, it will attempt to take the concept to Mumbai and neighboring municipalities as the population of vehicles is very high here in relation to the number of outlets. “
MRUs, used for refueling, can be conveniently parked in parking lots or open parks and plots of land approved by local authorities.
These units are an efficient means of reaching customers and will also accelerate the expansion plans of town gas distribution companies, given that setting up a CNG point of sale is capital and could be costly. Between ₹75 lakh and ₹1 crore.
In addition, the availability of land is a concern.
Although compared to CNG stations, the throughput of an MRU will be a little lower, the number of customers served will certainly be higher, pushing the CNG volumes. For CGD players, over 65% of their existing sales volumes come from co-located CNG outlets on OMC lands, and OMCs therefore require a higher commission.
Town gas distribution companies, such as MGL, IGL and Gujarat Gas, have urged the Union government to negotiate with the WTO after demanding a 90-100% increase in commissions from the current one. ₹4.5 per kg at ₹7-8 per kg.
The WTO, however, felt that by using their retail outlets, town gas companies not only had access to ready-made infrastructure, but also to customers, therefore, they were entitled to charge a cost. higher to distribution companies.
Questions emailed to spokespersons for WTO and town gas distributors on Monday were not answered until press time.
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