The Supreme Court on Wednesday held that the Petroleum and Natural Gas Regulatory Board (PNGRB) has no power to fix or regulate the maximum retail price at which gas is sold by city gas distribution entities like Delhi-based gas utility Indraprastha Gas to consumers. Besides, the court also said that the board, which regulates downstream transport tariffs for oil and gas, is not empowered to fix any component of network tariff or compression charge for entities having their own distribution network.
A bench headed by Justice Dipak Misra upheld the Delhi High Court’s 2013 judgment that quashed the provisions of Petroleum and Natural Gas Regulatory Board (Determination of Network Tariff for City or Local Natural Gas Distribution Networks and Compression Charge for CNG) Regulations, 2008 that was being construed by the board to empower it to fix the gas tariffs.
The bench said: “By no stretch of imagination, we can conceive that non-conferment of power on the board, in particular regard, is accidental. The legislative intention is absolutely clear and simple and, in fact, does not call for adoption of any other construction to confer any meaning to the existing words.”
According to the judges, since the legislature has not conferred such power on the board, the latter cannot on its own frame a regulation to determine network tariff for city or local gas distribution network and compression charge for CNG and the same . “… the entire regulation … deserves to be declared ultra vires, and we do so.” Justice Misra, writing for the bench stated.
Welcoming the judgment, Narendra Kumar, managing director, IGL, said that that “the highest court of the land has stood by its stand. This landmark verdict is bound to be a big boost for the entire city gas distribution sector which would now be looking at expansion.”