Petroleum Board rejects IGL objection to CNG retailing

Oil regulator PNGRB has rejected Indraprastha Gas Ltd's objections to procedure followed in ending its exclusivity in retailing CNG in the National Capital, sending its stock crashing by nearly 8 per cent.
The Petroleum and Natural Gas Regulatory Board (PNGRB) said IGL's exclusivity to retail CNG to automobiles and piped cooking gas to households in the National Capital has expired on January 1, 2012. Subsequent to this, the company's city gas distribution (CGD) network of pipelines is to be opened for access by third parties.
In its order, PNGRB said it had accepted the central government authorisation of IGL for Delhi CGD network on January 9, 2009, and as per its regulations exclusivity period for an existing entity was three years.

IGL had challenged this regulation before the PNGRB.
The Board however rejected the challenge saying it had issued "letter of acceptance of Central Government Authorisation of IGL for Delhi CGD network as a common carrier or contract on January 9, 2009. As per addendum to acceptance of central government authorisation..., the exclusivity period for NCT of Delh has expired on January 1, 2012."
The Board, the order said, was in the process of declaring city or local natural gas distribution networks in accordance with provisions of Section 20 of the PNGRB Act, 206.

"Hence, the entity's contention that the procedure for declaration for common carrier and contract carrier is not being followed by PNGRB is hereby dismissed," the order said.

Declaring a CGD contract or common carrier allows third parties to access the network.
Following the order, shares of IGL tanked 8 per cent to touch day's low of Rs 517.55 on BSE. The stock recovered some of the losses later but still closed down by 0.56 per cent at Rs 560.10.
Reacting to the order, IGL said, "the issue regarding ending of exclusivity of IGL in Delhi is sub judice before Delhi High Court vide Writ Petition no. 9374/2015."
The "High Court vide order dated September 30, 2015 has directed that any order passed by the Board (PNGRB) shall be subject to further order of this Court.