PNG, CNG consumers to get uniform insurance cover

In a recent meeting with stakeholders, the regulator noted that it is imperative that piped natural gas (PNG) consumers should also be insured as in the case with liquid petroleum gas (LPG). And along with domestic PNG consumers, commercial and industrial users of PNG and compressed natural gas (CNG) consumers should also be covered by insurance.

The open house discussion was held on 20 December, amid recent instances of leakages and accidents.

Insurance gaps

Although considered safer than LPG, sporadic instances of pipeline leaks in the case of PNG have also been reported. In May this year, four people were injured in Mumbai due to a leakage caused in a PNG pipeline during an excavation work. In November last year, one person died and three others were injured in Palwal, Haryana due to a pipeline leakage and eventual explosion.

CNG vehicles however report higher instances of such accidents. Last month, a collision between an LPG and a CNG truck in Jaipur claimed eight lives and 41 people were injured.

In October, a bus in Mumbai caught fire due to leakage of CNG from its fuel supply system.

The minutes released on 1 January said that there was unanimous consensus on the need for “uniform insurance policy” in the city gas distribution or CGD sector.

While insurance cover is provided in cases to CNG consumers and workers in CNG depots, there is no universal coverage and the PNG space is largely out of the insurance coverage.

Noting that PNG is a much safer fuel and is currently not covered under the insurance scheme, HPCL said that the CGD sector needs to be under the ambit of insurance.

Stakeholder consensus

“There was consensus among the stakeholders for covering the PNG consumers akin to LPG consumers and oil and gas marketing companies agreed to roll out the policy within two months’ time frame,” the regulator said in the minutes.

According to the regulator, CGD companies should match the best terms being offered for insurance, or enhance their offerings in providing immediate and general cover to all PNG and CNG consumers as in the case of liquefied natural gas (LPG).

It also said claim procedures need to be well thought-out, deliberated, covering known or common scenarios. In a bid to bring in convenience for consumers, PNGRB also suggested that efforts should be made to ensure that routine insurance claims do not require judicial oversight or intervention.

Damages to surroundings and neighbours should also be considered while formulating the policy and offering insurance cover, it said.

During the meeting its was proposed that oil marketing companies may speak to current insurers for the LPG sector to provide insurance cover to PNG consumers at the same premium as provided for LPG.

The regulator would also include insurance in the quality of service (QOS) regulations, making it mandatory for the entities to implement the insurance policy.

During the deliberations, representatives of the state-run Hindustan Petroleum Corporation Ltd (HPCL) noted that LPG consumers are currently safeguarded under the insurance policy which the three OMC’s—Indian Oil Corporation Ltd, Bharat Petroleum Corporation Ltd and HPCL—jointly subscribe to.

Gujarat Gas Ltd said that it currently follows two insurance policies: a commercial general liability (CGL) policy for which the sum insured is ₹175 crore for any third-party damages including consumers, vendors, erection sites, and second, a public liability (PL) policy for any compensation awarded by court.

It however, noted, “an additional scope on improvement in the current policies can focus towards covering individuals was highlighted by the board.”

Mumbai-headquartered Mahanagar Gas Ltd informed the regulator that it provides a PL insurance cover for industrial risk, which has an additional cover of ₹50 crore over and above the public liability cover and the Mahasuraksha Policy for the benefit of auto, taxi and drivers operating CNG-based vehicles.

PNGRB highlighted the need to extend similar insurance cover to its piped cooking gas customers.