Former secy to be head of petro regulatory body

The issues around the status of the petroleum regulator have been resolved with former consumer affairs secretary L Mansingh slated to become the chairman of the Petroleum and Natural Gas Regulatory Board.

"Issues relating to the status of the chairman of the regulatory board have been resolved. Mansingh's name, along with the names of the other members of the board, are with the Cabinet. The clearance is expected soon," a senior official said.

The setting up of the regulatory board has been delayed as the chairman of the board was given a status equivalent to that of a secretary to the central government.

However, chairpersons of other regulatory boards, such as the Telecom Regulatory Authority of India (Trai), are accorded a status equivalent to that of the Cabinet secretary.

"No one was willing to take up the offer then, but that issue has been resolved now," the government official said. "However, the Regulatory Act provides the chairman being at the secretary-level and that is how it is going to be."

Besides the chairperson, the regulatory board will have three other members. Ajay Tyagi, former joint secretary in the petroleum ministry, has already been appointed as secretary on the board.

Huge investments in transportation and marketing of gas and petroleum products have been held up due to the delay in setting up of the regulatory board. An official with British Gas, which is involved in marketing of gas, had recently told Business Standard that it had lined up thousands of crores of investment for city gas distribution projects, but the absence of the regulator had put the plan on hold.

The Petroleum Regulatory Board will regulate the refining, processing, storage, transportation, distribution, marketing and sale of petroleum and petroleum products excluding production of crude oil and natural gas.

A few officials in the government are, however, worried that companies have already signed gas pipeline deals even before the regulator has been appointed.

"Ideally it would have been the petroleum regulator's job to oversee cross country gas pipelines," one government official said.

Another official said that the pricing of gas would also be outside the scope of the regulator. "The regulator will basically ensure that the market remains competitive and cartels are not formed. He would have the power to look into pricing of petroleum products," he said. "However, that is not likely to be his full-time job," he added.