The Petroleum and Natural Gas Regulatory Board, the country’s gas regulator, will now get powers to authorise gas pipelines and the city gas distribution (CGD) networks, as the government has finally decided to notify a crucial Section in the PNGRB Act of 2006.
Section 16, which will be notified with effect from July 15, authorises the regulator to lay, build, operate or expand a city or local natural gas distribution network.
“From tomorrow, Section 16 of the Act is being notified. The PNGRB has been empowered to function to its full capacity. We hope that a new era in CGD and pipelines will be set in motion,” Petroleum Secretary S Sundareshan told reporters here.
| EMPOWERED REGULATOR |
| * Section 16 of the Petroleum and Natural Gas Regulatory Board Act has been notified with effect from July 15 |
| * The Section gives PNGRB powers to authorise companies to retail CNG to automobiles and pipe cooking gas to households |
| * The regulator is likely to come out with another round of auction this month. Six to seven cities may be offered |
In an order on January 21, the Delhi High Court had struck down the powers of PNGRB to issue authorisation for CGD projects due to the non-notification of Section 16.
The notification comes after Delhi-based natural gas retailer Indraprastha Gas Ltd (IGL), which claimed a pre-PNGRB authorisation for CNG operations in Ghaziabad, and Voice-of-India, a non-government organisation, had challenged PNGRB’s power to issue authorisation for a CGD network for Ghaziabad in the Delhi High Court.
The central government had also supported IGL’s case. The petroleum ministry had about a fortnight before protected the interest of IGL by granting it authorisation for Ghaziabad.
The IGL action followed the regulatory board’s questioning the CGD distribution right of IGL.
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The Ministry of Petroleum and Natural Gas did not notify the Section when the Act was notified on October 1, 2007. The HC judgment had put a question mark on the rollout of the CGD network, at a time when the domestic production of natural gas doubled to 140 million standard cubic metres a day (mscmd) on account of the output of K-G Basin gas. Companies, including GAIL Gas, Reliance and Adani, had already made significant investment in the CGD business.
In March-April 2009, the board had issued city gas licences for six cities — Kakinada in Andhra Pradesh, Mathura and Meerut in Uttar Pradesh, Kota in Rajasthan, Dewas in Madhya Pradesh and Sonepat in Haryana.
In the second round, it invited bids for seven more cities — Allahabad, Ghaziabad and Jhansi in Uttar Pradesh, Shahdol (Madhya Pradesh), Rajahmundry and Yanam (Andhra Pradesh) and Chandigarh, but did not award licence on restraint from the court.