IGL challenges PNGRB's decision to slash CNG rate in Delhi

Last Updated: Tuesday, May 8, 2012 - 18:35

New Delhi: Indraprastha Gas Ltd (IGL) Tuesday told the Delhi High Court that Petroleum and Natural Gas Regulatory Board (PNGRB)'s decision to slash network tariff and CNG compression charge on sale of piped natural gas (PNG) and CNG amounted to usurping the state's power by it.

"PNGRB has usurped the state function by misinterpreting the legal provisions," former Additional Solicitor General Parag Tripathi, appearing for Delhi government-owned IGL, told a bench of Acting Chief Justice A K Sikri and Justice Rajiv Sahai Endlaw.

The oil and gas regulator lacked the power to fix network tariff and compression charge for PNG and CNG, which, in any case, cannot be exercised with "retrospective" effect, said Tripathi.

"First of all, there was no such power (with PNGRB), even if it is assumed that there is such a power then it (price fixation) has to be fixed and implemented with prospective effect," the lawyer for IGL said and cited various case laws in support of his argument.

The IGL, sole supplier of PNG and CNG in Delhi and its suburbs, had earlier moved the court against the order of PNGRB, which has slashed network tariff and CNG compression charge and asked IGL to refund the excess amount charged by it from consumers since 2008.

Additional Solicitor General A S Chandhiok, appearing for PNGRB, however opposed the IGL's plea and said the regulator was "well within" its powers to slash the network tariff and CNG compression charge on sale of piped natural gas (PNG) and CNG here for extending benefits to consumers.

PNGRB, in its order on April 9, had not only fixed the charges with retrospective effect from April 1, 2008 but had also ordered IGL to refund extra money, charged by it, to customers.

The court has now fixed the matter for further hearing on May 22 as the arguments on behalf of regulator PNGRB remained inconclusive today.

Earlier, the court had refused to stay the PNGRB's order.

Gas distributor IGL, in its petition, has challenged the constitutional validity of the PNGRB's decision saying the regulator has no right to decide the rate of network tariff and CNG compression charge.

It added that the decision to slash the rate with retrospective effect would lead to a financial burden of Rs 1,500 crore on IGL, more than its net worth.

The PNGRB has fixed IGL's pipeline network transportation tariff at Rs 38.58 per million metric British thermal unit (mmBtu) as against Rs 104.05 per mmBtu proposed by IGL.

The PNGRB has also cut the compression prices for CNG to Rs 2.75 a kg from Rs 6.66 a kg submitted by IGL. The new charges would be applicable from April 1, 2008.

The IGL had last hiked the prices of CNG gas in Delhi by Rs 1.70 a kg and by Rs 1.90 per kg in Noida, citing rise in input cost as the factor, in March this year.

The current consumer price of CNG is Rs 35.45 a kg in Delhi and Rs 39.80 a kg in Noida, Greater Noida and Ghaziabad.


First Published: Tuesday, May 8, 2012 - 18:35

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