IGL insists on keeping network tariffs a secret

Vol 15, PW 17 (08 Mar 12) People & Policy

Closely guarded secrets are best kept that way, according to Indraprastha Gas (IGL).

PETROWATCH learns the Delhi-based gas retailer is protesting against moves by the Petroleum & Natural Gas Regulatory Board (PNGRB) to fix and publish ‘network tariffs’ for CGD players across the country by end-May. Why is IGL unhappy “Compelling us to publish our ‘network tariff’ in the gas bill we send to customers could seriously affect our competitive position,” wrote IGL director commercial Manmohan Singh to the PNGRB on March 2.

“Such a move is not contemplated under the PNGRB Act.” Four years ago the PNGRB published a set of ‘network tariff’ regulations and has wanted to introduce greater transparency to retail gas pricing since.

These guidelines stipulate that companies should list their gas infrastructure and sourcing costs openly and not disguise them when passed on to customers. But the PNGRB never implemented the regulations as the man behind the proposal, member commercial LK Singhvi, retired in November 2009.

Singhvi’s post lay vacant for over two years until he was finally replaced by PK Bishnoi in January this year. Under PNGRB rules laid down in 2010, every retail gas player must separately indicate on its gas bill any pertinent details like ‘sales volume’; ‘heat value’ (in mmbtu); the basic gas price (in Rs/mmbtu); the ‘network tariff’ plus all relevant taxes and other charges.

“Customers have the right to know what they’re paying for,” says a PNGRB source. “Otherwise companies can charge anything.

We must protect the consumer.” Many companies continue to charge gas customers a ‘bundled price’ despite the PNGRB calling on all retail gas players to disclose their network tariff formulas by September 1, 2011.