In a relief to Indraprastha Gas Ltd (IGL), the Delhi High Court today quashed the Petroleum & Natural Gas Regulatory Board (PNGRB)’s order that had slashed with retrospective effect the network tariff and compression charges of the city gas distributor in Delhi and adjoining areas.
A report by Press Trust of India said a bench of acting Chief Justice A K Sikri and Justice Rajiv Sahai Endlaw set aside the April 9 order of the regulator, terming it “illegal” and saying PNGRB was not “empowered” to fix or regulate the maximum retail price at which gas was to be sold by retailers.
The board, in its order, had asked IGL to cut down its network tariff by 63 per cent with retrospective effect. It had also asked the company to refund the difference to its customers for the period from April 1, 2008, till the date of issuance of the order for compressed natural gas (CNG) and piped gas. The order was expected to translate into a 20 per cent price cut in CNG in the capital and 10 per cent in piped natural gas price. For IGL, it would have meant a hit of around Rs 1,000 crore since the order had a retrospective effect.
The bench made it clear the board was not empowered to fix any component of ‘network tariff’ and ‘compression charges’ for CNG as contended by IGL. “We further hold that the board is also not empowered to fix any component of network tariff or compression charge for an entity such as the petitioner (IGL), having its own distribution network. The provision of the regulations, so far as construed by the board to be so empowering it, is held to be bad/illegal,” said the PTI report quoting the court.
IGL had contended that PNGRB did not give it a hearing and calculated the tariff on the basis of the 2008 price levels for various inputs and charges. While an IGL spokesperson did not comment, PNGRB chairman
S Krishnan said the regulator would study the judgment before taking a decision on appeal.
IGL had pleaded against the regulatory board’s decision to regulate its network tariff and selling price. The regulator had ordered the company to reduce its network tariff to Rs 38.58 per million British thermal units (mmBtu), against Rs 104.05 per mmBtu sought by the company. It had also cut the compression charge for CNG by 59 per cent to Rs 2.75 per kg, from Rs 6.66 per kg proposed by the company.