IGL drags oil regulator to court on licence issue

Indraprastha Gas Ltd (IGL) has challenged oil regulator PNGRB's authority to give licences for retailing CNG to automobiles and piped cooking gas to households before the Delhi High Court, saying the Government had not given the regulator explicit powers to do so.     

In its petition, IGL accused that the PNGRB was issuing Letter of Intent to private companies under the self made Petroleum and Natural Gas Regulatory Board (Authorising Entities to Lay, Build, Operate or Expand City Gas Distribution Networks) Regulations 2008.     

"(Through) The impugned regulation, PNGRB has tried to usurp the power of grant of authorisation to an entity. PNGRB could not confer such powers itself by way of regulation when the parent act under which the impugned regulation was framed does confer such right to PNGRB," submitted IGL in its petition filed through its counsel S K Pandey.     

Admitting the petition, a division comprising Justice M B Lokur and Justice A K Pathak has issued notice to the board and the Centre.     

IGL said the regulator cannot grant city gas licences as the Central government has still not notified Section 16 of the PNGRB Act that explicitly gives the regulator the right to authorise companies for retailing compressed natural gas (CNG) and piped gas.

"PNGRB could not confer such powers to itself for authorisation of an entity for city gas distribution by way regulations when the provisions of the Section 16 of PNGRB Act 2006 conferring such powers is still not notified," said IGL requesting the court to quash the regulation made by PNGRB.     

IGL further added that despite having no powers, PNGRB invited bids for development of city gas distribution network.     

The city gas distributor had applied for gas distribution network licence for Gaziabad, neighboring Delhi in December, 2006 and operating in Gaziabad under the directions of the Environment Pollution Control Authority (EPCA).     

However, after some time PNGRB without disclosing any reasons informed IGL that EPCA authorisation was not enough for grant of a licence for Gaziabad and called for a hearing.     

"In the absence of the material, the hearing was an empty formality. It also indicated that PNGRB had already prejudiced to the issue...With a determined mind," submitted IGL adding that PNGRB invited bids for Gaziabad on February 13, 2009, without rejecting its application.     

"This bid could be invited only upon rejection of our application under section 18 of the regulation," submitted IGL.

Later, it filed an application before the board requesting to provide detailed information/material on which its application was found not satisfactory.

In response to it, PNGRB constituted a board chaired by its secretary, who has no authority to participate in such proceedings.    

IGL further contended that as per the PNGRB Act, only its Chairperson, Member (Legal) and other members appointed by the central government could chair that board.     

In addition to that PNGRB gave the reasoning for its rejection orally only and postponed its hearing and later rejected its bid finally on March 19.    

Last week, IGL has also filed another petition before the energy tribunal APTEL where it has challenged rejection of its bid.