City gas distribution (CGD) projects are not able to keep up with the timelines set by the Petroleum and Natural Gas Regulatory Board (PNGRB), according to a report by the Federation of Indian Chambers of Commerce & Industry (FICCI).

The report released earlier this week said that barring Delhi-NCR (National Capital Region), Mumbai and Gujarat, CGD development has been slow due to lack of major anchor customers in non-metros, lack of policy and judicial support and local or state level clearances and administrative challenges.

Noting that the CGD industry poses some state level challenges, the report said, “Pipeline laying has faced land acquisition challenges due to local farmers’ protest and unviable routes proposed by state governments, causing major project delays.”

Listing changes in government policy needed to bring about better adoption of natural gas, the report said, “This is the stage when natural gas must be brought under GST (Goods and Services Tax) and more importantly, gas should be treated at par with coal with 5 per cent GST.”

FICCI also proposed a customs duty waiver on LNG (Liquefied Natural Gas) and mandating use of gas in industries instead of fuel oil, furnace oil, and petcoke to address environmental issues.