MRTPC issues notice to IGL for overpricing

Monopolies and Restrictive Trade Practice Commission (MRTPC) has initiated action against Indraprastha Gas for overpricing after its investigative arm, Director General of Investigations and Registration (DGIR), recommended measures against the company.

Admitting a report by DGIR, MRTPC has started judicial enquiry against the company by issuing a notice of enquiry. The commission has directed IGL to file its reply in four weeks.

DGIR had found IGL taking "undue advantage" of being the sole supplier of natural gas in the national capital region  thus deriving "unreasonable profits."

The report mentioned that IGL, which was buying gas at Rs 5.29 per square cubic meter (SCM) and selling it to customers at Rs 13.52 per scm, was making profit to the tune of 57% "which does not seem reasonable."

DGIR also pointed out that IGL's reserves and surplus have increased approximately 293% in the last three years. "The analysis of the annual account of IGL for the last three years discloses the fact that in absence of any competition, IGL is making profit to the tune of 57%, which is not reasonable, and this is why its reserves and surplus have increased by 293% over a period of three years and its earning per share of Rs 10 has increased by 67.80% during the same period," the report said.