IOC challenges PNGRB decision on fuel pricing

Indian Oil Corporation (IOC) has challenged the decision of the Petroleum and Natural Gas Regulatory Board (PNGRB) to look into pricing of petrol and diesel at government-approved rates before the energy tribunal APTEL contending that PNGRB has no jurisdiction in this matter.      

In its petition filed before the Appellate Tribunal for Electricity (APTEL), IOC, supported by sister public sector firms like ONGC, challenged PNGRB's decision to look into the pricing of the two auto fuels contending that the downstream regulator had no jurisdiction to decide the price.      

At the proceedings before APTEL, Abhinav Vasisht, counsel appearing for IOC, submitted that the government was yet to notify petrol and diesel under the purview of PNGRB and so their pricing cannot be reviewed.      

IOC's response comes after private retailers Reliance Industries, Essar Oil and Royal Dutch Shell approached PNGRB alleging that public sector firms IOC, Bharat Petroleum and Hindustan Petroleum had formed a cartel and are controlling the prices of petrol and diesel.      

Acting on the complaint filed by the private producers, PNGRB had decided to look into the issue and this was challenged by IOC.      

IOC submitted that the government as a matter of its policy of insulating customers from high prices, had directed PSUs to sell the two fuel at affordable rates despite global oil prices touching an all-time high.

IOC was also supported by Oil and Natural Gas Corporation (ONGC) and Oil India (OIL) in this matter.      

Supporting IOC, ONGC's counsel during the proceeding of the tribunal rejected the allegation of the private producers and submitted that they were selling petrol and diesel much below the international prices on the directions of the government, which is a majority shareholder in their company.      

"The government direct us to give subsidy irrespective of international prices as a part of its public policy matter," he submitted.      

Adding to that Girija K Verma, counsel of OIL, submitted that pricing of petrol and diesel is a government policy and PNGRB has no jurisdiction.      

Rejecting PSUs contentions, Rajeshwar Tyagi, counsel appearing for PNGRB, submitted that it was doing under the power granted to it under section 11 (A) of the PNGRB Act, which allows it to protect the consumer's interest.      

"PNGRB being a regulator and adjudicator has right under section 11 (A) to act in the public interest... We are a regulator and if there is some dispute then some one would have to adjudicate... What is the idea of having a regulator, there should be a fair play in the industry," said APTEL.      

On this, the tribunal asked the board, "All the powers are not conferred to you... Could you fix the price in spite of that under section 11 (A)".      

After a brief hearing, APTEL whose jurisdiction has been recently extended to oil and gas sector reserved its order over the petition filed by IOC.