Regulator asks city gas firms to seek 're-authorisation'

The Petroleum and Natural Gas Regulatory Board (PNGRB) has written to all existing city gas distribution companies asking them to get themselves "re-authorised" within a week.

The regulatory board has also asked the gas retailers to stop expansion of existing pipeline networks till they are re-authorised by the board.

Existing city gas companies started operations before the regulator formally came into being on October 1, 2007. Their city of operation was chosen by the petroleum ministry after directions came from the Supreme Court.

The PNGRB wants these companies to now get licences from it as it wants all city gas operations to be routed through the regulatory board.

The regulator had asked existing city gas companies such as Delhi-based Indraprastha Gas (IGL), Mumbai-based Mahanagar Gas and Gujarat-based Gujarat Gas to get the new licences before March 31. IGL had sought an extension of this date, but it was not granted.

"We have received a letter asking us get our company re-authorised," said a senior official with a city gas company. "It remains to be established whether we actually need re-authorisation," the official added.

While confirming that it had received such a letter, IGL Managing Director Om Narayan declined to comment.

The government while notifying the Petroleum and Natural Gas Regulatory Board Act, 2006, on October 1, 2007, did not notify Section 16 of the Act. The section deals with existing city gas companies.

"Since Section 16 is not notified, the regulator has no way of dealing with the existing companies," another top official of a city gas company said. "The petroleum ministry had authorised us and we will continue to function in the city we have been allocated," the official added.

A regulatory board official had earlier said that since there was no directive on how to deal with existing players these companies would need to get themselves re-authorised.

The regulatory board has also asked the existing companies to stop expansion of its pipeline network in the cities. "Till they are re-authorised these companies can not be allowed to expand," a regulatory board member said.

IGL, as also a few other city gas companies such as Pune-based Maharashtra Natural Gas and Kanpur-based Central UP Gas, are going ahead with their expansion in their cities as demand for gas in cities is continuously growing.

"Even the state government officials keep urging to speed up our expansion," SP Selvam, managing director of Central UP Gas, had told Business Standard in early March.