 "Indraprastha Gas Ltd")
The Petroleum & Natural Gas Regulatory Board (PNGRB) has ruled the exclusivity period of Indraprastha Gas (IGL) for city gas distribution (CGD) business in the national capital territory (NCT) of Delhi has ended. The order saw IGL shares on the BSE plunge to Rs 517 in early trade after opening at Rs 563.
The company, which enjoys monopoly in the city, said in a declaration to the stock exchange that expiry of its exclusivity in Delhi was sub-judice and that the Delhi High Court had through its September 30, 2015, order “directed that any order passed by PNGRB shall be subject to further order of the court”. The scrip recovered partially after the statement and ended the day at Rs 560.
PNGRB in its order on Thursday said that the Centre’s authorisation for IGL’s city gas distribution in Delhi was given in 2009 and according to the PNGRB Act, the exclusivity period for an existing entity is three years; hence, IGL’s exclusivity for the Delhi market expired on January 1, 2012.
The regulator also noted it was in the process of declaring city or local natural gas distribution networks in accordance with the provisions of Section 20 of the PNGRB Act. It dismissed IGL’s petition that the procedure for common carrier and contract carrier was not being followed by the Board. It said PNGRB is authorised to declare a CGD network in a geographical area as common carrier or contract carrier after following due procedure.
The Act provides exclusivity of five years to new players and three years to existing ones, and since the government authorisation for IGL was sent by the ministry of petroleum and natural gas in 2009, IGL’s exclusivity ended in 2012.
Incorporated in 1998, IGL took over Delhi City Gas Distribution Project in 1999 from GAIL (India) Limited.
The project was started to lay the network for the distribution of natural gas in the National Capital Territory of Delhi to consumers in the domestic, transport, and commercial sectors. The company promoted by GAIL (India) Ltd. Bharat Petroleum Corporation Ltd. (BPCL) has been at odds with PNGRB ever since the regulatory board was set up in 2006.
