SC rejects PNRB plea seeking power to regulate prices of CNG

Observes that PNRB Act does not confer such power to the board

The Supreme Court today dismissed the appeal of the Petroleum and Natural Gas Regulatory Board (PNRB) which had claimed the power to fix or regulate the price of CNG. The PNRB Act does not confer such power on the board, and the claim of the board has “no substance”, the judgment said.

Indraprastha Gas Ltd had challenged in the Delhi high court the order of April 2012 issued by the board arguing that the Act empowered the board only to fix the transportation tariff; that the transportation rate is to be charged either by a common carrier or a contract carrier of gas from a person engaged in marketing of gas, for moving the gas.

IPGL, which was set up as a joint venture between GAIL and BPCL to comply with the Supreme Court order to introduce pollution-free CNG and piped gas, further argued that the Act nowhere authorized the board to fix the price to be charged by a marketer of gas from its consumers. This view was accepted by the high court.

The board appealed to the Supreme Court. It pointed out several letters in which the gas distributing companies had accepted its power to fix tariff. However, the bench headed by Justice Dipak Misra upheld the high court judgment, handing over victory to the gas distributing companies to fix price.