The downstream oil industry regulator, Petroleum and Natural Gas Regulatory Board (PNGRB), will make a fresh plea before the Supreme Court for an early hearing to the case that has kept on hold the activities of the Board.
The March 15 (2010) interim order of the Supreme Court had said the Board can only process pending applications, but can pass final orders. Prior to this, the Delhi High Court, through an order on January 21, 2010, had struck down the powers of PNGRB to authorise city gas distribution (CGD) projects. The order was challenged by the Board before the apex court.
“The Board will move an application soon for early hearing of the case, since it is unable to authorise the city gas distribution network and trunk pipelines in spite of the notification of Section 16 in July,” said a Board official. Though the PNGRB Act came into effect from October 1, 2007, the government did not notify Section 16 of this Act. The said section empowers the Board to authorise the companies “to lay, build, operate or expand a city or local natural gas distribution network”.
PNGRB had in the first round, in early 2009, invited bids for CGD in six cities — Kakinada in Andhra Pradesh, Mathura and Meerut in Uttar Pradesh, Kota in Rajasthan, Dewas in Madhya Pradesh and Sonipat in Haryana.
Bids were invited for seven cities in the second round — Allahabad, Ghaziabad and Jhansi in Uttar Pradesh, Shahdol (Madhya Pradesh), Rajahmundry and Yanam (Andhra Pradesh) and Chandigarh.
However, this round got stuck in a legal tussle between Indraprastha Gas Ltd and the board on CGD rights for Ghaziabad. IGL, keen to enter the CGD business in Ghaziabad, approached Delhi High Court, claiming the Board had no powers to conduct CGD bidding.
The Court had passed its order on January 21, 2010 striking down the Board’s power. IGL claimed a pre-PNGRB authorisation for CGD operations in Ghaziabad. This position was also upheld by the Union petroleum ministry, that issued a formal authorisation to IGL on June 29 last year.
The Board has also challenged the authorisation in the apex Court. All these matters have been clubbed by the court. The government also authorised the winners of the first round of CGD. The third round of CGD bidding is also underway.
With the SC restriction on final orders, the Board has not been able to grant authorisation to the GSPC, IOC, BPCL, HPCL consortium that emerged the front-runner in the recently-concluded bids for three trunk pipelines.
