The Petroleum and Natural Gas Regulatory Board (PNGRB) has decided to challenge the order of the Delhi High Court that had struck down its order on rates and compression charges of Indraprastha Gas Ltd (IGL), the monopoly supplier in this city. It will shortly file an appeal in the Supreme Court.
“The Board has gone through the judgement. A decision has been taken to appeal,” S Krishnan, chairman of the Board, told Business Standard.
In early April, PNGRB had passed an order directing IGL to reduce prices for its consumers in Delhi with immediate effect, after factoring in the reductions in both network rates (for compressed natural gas, piped natural gas and industrial consumers) and the compression charges levied only on CNG. It had also asked the company to pay the refunds with effect from financial year 2008-09, the first operating year for the company after the board was formed in October 2007. The refund is estimated at Rs 1,000 crore.
IGL moved the HC against the Board order. It said PNGRB was not entitled to regulate the price of gas sold by the company and the variables taken into account by the board to calculate the network rates were misleading. In its judgement of
June 1, the HC said PNGRB was not empowered to fix any component of network rates or compression charges for entities such as petitioners who had their own distribution networks.
The day the IGL adverse order became public, the company’s share price at the Bombay Stock Exchange crashed nearly 50 per cent from the previous day, to Rs 170. On June 1, when the HC gave its favourable order, IGL’s share price recovered to Rs 271. On Friday, IGL’s share closed at Rs 242.75.
The litigation on IGL has delayed similar orders on network rates and compression charges for various companies such as Gujarat Gas (Bharuch, Surat), Mahanagar Gas (Mumbai), Maharashtra Natural Gas (Pune) and Central Uttar Pradesh Gas (Kanpur).