Oil sectors regulators extend city gas project’s deadline by 251 days due to COVID-19 lockdown

Oil sector regulator PNGRB has given extra time of eight and a half months to companies like Indian Oil Corporation, GAIL, and Adani Gas to complete their city gas project rollout commitments that had been halted due to COVID-19 lockdown.

The Petroleum and Natural Gas Regulatory Board issued an order granting more time to 41 city gas companies to complete their rollout commitment on November 5. However, the time varies from 129 days to 251 days across the varied geographical area, and it depends on the duration of the COVID-19 lockdown.


The extra time is given against the national lockdown of 69 days which was imposed to contain the virus from spreading. A 60-day restoration period is given on top of the lockdown period.

PNGRB (Petroleum Gas and Natural Gas Regulatory Board) has issued license to retail CNG to automobiles and piped natural gas to household kitchen and industries in 230 geographical areas across the country. The Regulatory board said, “However, in recent times, the entitles have been facing a catastrophic situation due to the outbreak and the spread of COVID-19, a pandemic declared by the WHO (World Health Organization) that has affected every sector across the globe, including the city gas distribution business.”

The regulatory body has listed the pandemic as a condition for force majeure and given companies like IOC, GAIL, Adani Gas, and HPCL extra time.

Further, PNGRB commented, “approved the extension considering the national lockdown by Government of India (69 days), additional lockdown/restrictions imposed by a state government or by district authorities and a restoration period of 60 days.”

On the account of COVID-19, the board granted an extension to 41 CGD entities in respect of 185 Gas that have been considered eligible for force majeure. The institute added, “The decision of the board in this regard shall be final and binding on the entity.”

In September, PNGRB issued a guideline listing riots, natural disasters, and government restrictions as a condition for allowing an extension to complete city gas rollout obligations. The guidelines came into perspective due to the nationwide lockdown to curb the spread of the COVID-19 since March 25.

Several city gas companies claimed work freeze on-site due to lockdown. These claims were not immediately accepted due to the absence of guidelines listing events that can trigger force majeure.

Force majeure refers to a clause that removes liability from the contracts after natural and unavoidable catastrophes.