SC notice to Centre, IGL on PNGRB powers to fix tariff

Written by Indu Bhan | Indu Bhan | New Delhi | Updated: Aug 10 2012, 09:07am hrs
The Supreme Court on Thursday issued notice to Delhis gas utility Indraprastha Gas Ltd (IGL) and the Centre on a petition challenging the Delhi High Court judgment that held that petroleum and natural gas regulator PNGRB has no jurisdiction to fix rates or regulate gas tariffs.

A bench headed by Justice KS Radhakrishnan sought reply from the ministry of petroleum and natural gas and IGL on PNGRB plea alleging that the HC failed to note that it had not fixed the maximum retail price but only sought to fix the network tariff and compression tariff charges representing cost of transportation which are completely different. The latter is only one of the many components of the former.

As a result of the judgment, a statutory body such as the board is now left without any power to fix transportation tariff for city gas distribution networks and, therefore, unable to discharge the function entrusted to it, the petition stated.

The net result of the judgment is that the board has been deprived of its statutory powers to regulate entities like IGL who are now enjoying a complete unregulated monopoly, the board stated, adding that its function is to protect the interest of the consumers and ensure fairness and transparency.

The HC in its June 1 order had also said that PNGRB is not empowered to fix or regulate the maximum retail price at which gas is to be sold by IGL and other such entities. It also mentioned that the board is also not empowered to fix any component of network tariff or compression charges for any CGD entity.

The HC order had come on the IGLs plea challenging an order from the regulator to cut its network tariff to R38.58 per million British thermal unit as against R104.05, down by around 63%. The regulator fixed CNG compression tariff at R2.75 a kg against R6.66/kg charged by IGL.

PNGRB in its order dated April 9 has asked IGL, the sole supplier of compressed natural gas in Delhi & NCR to cut down its network tariff by 63% and compression charges by 53%. In a retrospective decision, it also asked the company to refund the difference to its customers for the period from April 1, 2008 till the date of issuance of order.