The Petroleum and Natural Gas Regulatory Board (PNGRB) is faced with a conflict of interest arising from its senior staff being from companies like GAIL, Indian Oil and HPCL, which the board is supposed to regulate.
As per a rough count, more than a dozen officials from state-owned oil companies are part of the senior management team of the regulator and, in many cases, they are on deputation from their respective companies. These officials continue to get paid by their parent companies but are supposed to aid the regulator?s decisions that are often in conflict with the interests of the oil companies.
?There are many senior company officials from public sector oil companies in important decision-making positions with the regulator but continue to draw salary from their own companies. This raises a question mark over the independence of the regulator and its ability to take free and fair decisions,? said a senior official of the sector regulator, who asked not to be identified.
In 2007-08, the government had sanctioned around 48 positions for the regulatory body but not one was filled, leading to the seats lapsing. This paved the way for in-house appointments by the government to run the regulator?s office.
?The trend of in-house appointments clearly indicates the government?s intent not to allow the regulator to take decisions in the right manner,? said former oil secretary SC Tripathi, adding that in fact the government was against the PNGRB being totally independent, and that the appointment of oil PSU officials was a way of indirectly controlling the decision-making process at the regulator.
In a recent case also, the role of the regulator had come under scrutiny where prior information about a proposed move delayed a decision on the matter, the PNGRB official, without specifying the case. The influence on PNGRB is also seen from the delays on the part of the government to notify certain orders that would have allowed the regulator to monitor prices and prevent restrictive trade practices.
The PNGRB was constituted by the central government in 2007 to ensure development in the refining and distribution of petroleum and petroleum products. Its objective is to protect the interests of consumers as well as entities operating in the sector, facilitate and promote a level playing field, and to ensure investments required for the sector.
