CGD-VI imminent following legal green signal

Vol 19, PW 1 (10 Sep 15) People & Policy

Expect the imminent launch of a new retail gas licensing round despite a Supreme Court verdict which suggested the exact opposite, say gas retailers in touch with the PNGRB.

Industry sources say the PNGRB has sought and obtained legal opinion on the implications of a Supreme Court ruling in a case launched by Delhi-based Indraprastha Gas. On July 1, justices Dipak MisraIt and PC Pant ruled that the PNGRB has no right to set network tariffs and compression charges for gas retailers.

Most assumed this meant all previous licensing rounds held by the PNGRB were invalid as they were awarded using network tariffs and compression charges as criteria. But in August Solicitor General of India (Ranjit Kumar) is learnt to have advised the PNGRB that the ruling covers only its relationship with companies established before the PNGRB was set up in 2008 like IGL, MGL (Mahanagar Gas), GSPC Gas and others.

A source says the ruling neither bars the PNGRB from launching new licensing rounds nor invalidates previous bid rounds because in earlier rounds, “the network tariff and compression charges are market-determined, not set by the PNGRB.” In the next round (CGD-VI) the PNGRB is expected to invite bids for 30 cities.

“The PNGRB is under pressure from the PMO to offer as many cities as possible," we hear, "and in the shortest time."