SC turns down gas tariff regulation plea

Companies supplying gas are now free to fix their own tariff with the Supreme Court on Wednesday turning down a plea by the Petroleum and Natural Gas Regulatory Board (PNGRB) seeking power to regulate prices of intra-city supplies.

An apex court bench, headed by Justice Dipak Misra, dismissed a PNGRB plea seeking control over the supply of gas by different companies, including Indraprastha Gas Limited, within cities.

The Board contended that even if it was not fixing maximum retail prices of gas, IGL and other gas companies should provide it documents relating to intra-city supplies so that it could post on its website the MRP the consumers should pay.

IGL refused to share these details with the Board.

The PNGRB challenged in the apex court a decision of Delhi High Court on June 1, 2012, which quashed the board's order on network tariff and compression charge.

The high court held that PNGRB was not empowered to fix or regulate maximum retail price at which gas was to be sold by IGL to its consumers.

The high court also said that the Board was not empowered to fix any component of network tariff or compression charge for any entity like IGL having its own distribution network, while quashing PNGRB order dated April 9, 2012, fixing maximum retail price and requiring IGL to disclose the network tariff and compression charges to its customers.

PNGRB asked IGL in 2012 to reduce network traffic by 63 percent and ordered the company to refund the difference to customers with retrospective effect from April 1, 2008.

Among the transport fuels, compressed natural gas (CNG) has become 27 percent cheaper than diesel after reduction in natural gas prices from April 1 to 4.66 per million British thermal units (mBtu).

After the government's latest gas price revision, IGL cut the CNG rate to Rs.37.55 per standard cubic metre (scm).

Before the reduction, piped natural gas (PNG) was five percent costlier than subsidised cooking gas.

While announcing the cut in CNG and PNG prices on April 1, IGL said that at the revised price, the economics in favour of CNG would be over 22 percent compared to diesel-driven vehicles.

CNG also works out nearly 55 percent cheaper on running cost when compared to petrol-run vehicles.

IGL caters for about 800,000 CNG vehicles in the national capital region, including 520,000 private cars.