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CNG pricing row: HC rules in favour of IGL

The Delhi High Court made it clear that Petroleum and Natural Gas Regulatory Board is not "empowered" to fix or regulate the maximum retail price at which the gas is to be sold by retailers.

twitter-logo PTI   New Delhi     Last Updated: June 1, 2012  | 18:57 IST

The Delhi High Court on Friday quashed the Petroleum and Natural Gas Regulatory Board (PNGRB) order, which had slashed with retrospective effect the network tariff and compression charges for CNG distributed by Indraprashta Gas Limited (IGL) in Delhi and adjoining areas.

A bench of Acting Chief Justice A K Sikri and Justice Rajiv Sahai Endlaw set aside the April 9 order of the oil regulator terming it as "illegal", saying that the PNGRB was not "empowered" to fix or regulate the maximum retail price (MRP) at which the gas is to be sold by retailers.

"The order dated April 9, 2012 to the extent of fixing the maximum retail price or requiring the petitioner (IGL) to disclose the network tariff and the compression charges to its consumers is struck down/quashed," the court ruled.

The division bench made it clear that the regulatory board was not empowered to fix any component of 'network tariff' and 'compression charges' for compressed natural gas as contended by the IGL.

"We further hold that the board is also not empowered to fix any component of network tariff or compression charge for an entity such as the petitioner (IGL), having its own distribution network. The provision of the regulations, so far as construed by the board to be so empowering it, is held to be bad/illegal," court said.

The court's order came on a plea by the IGL, which had contended that the PNGRB did not give it a hearing and calculated the tariff on the basis of the 2008 price levels for various inputs and charges.


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