Petro Regulatory Board to shortly get clear authority.
The government is planning to provide more teeth to the Petroleum and Natural Gas Regulatory Board (PNGRB) by notifying Section 16 of the PNGRB Act which deals with city gas distribution (CGD).
“Since PNGRB has been involved in a series of legal controversies over its powers to issue authorisation letters for CGD projects, we have decided to notify the particular section of the Act to empower the Board and avoid such legal disputes in future. Therefore, we have sought more time from the Delhi High Court on the petition filed by a non-governmental organisation (on the issue),” said a senior official at the petroleum ministry.
Section 16, which gives the Board regulatory power to authorise the companies “to lay, build, operate or expand a city or local natural gas distribution network”, was specifically excluded from the notification dated October 1, 2007, when the Act came into effect. The said section has yet to be notified.
PNGRB has so far issued authorisation letters for city gas projects in six cities — Dewas (Madhya Pradesh), Kakinada (Andhra Pradesh), Kota (Rajasthan), Mathura (Uttar Pradesh), Meerut (Uttar Pradesh) and Sonepat (Haryana). Bids for another seven cities have been invited and the Board is in the process of finalising these. The Board expects the city gas distribution network to spread to 100 cities by the end of the Eleventh Five-Year Plan.
However, companies like Indraprastha Gas Ltd (IGL), which are involved in the CGD business, have challenged the powers of the Board to grant authorisation letters for city gas operations. In April, the company approached the appellate tribunal for electricity against the net worth criterion laid down by the Board for city gas projects. IGL had bid for two cities - Sonepat and Meerut - but was disqualified by the Board on the net worth criterion.
In April, the Delhi High Court issued notices to the Union government and the PNGRB on a petition filed by an NGO alleging the board did not have the authority to issue a licence to begin CNG retailing in cities. The NGO, Voice of India, had approached the court requesting quashing all such authorisations given by PNGRB for development of CNG pipelines network in cities. The next date of hearing is August 12.
