Anti-PNGRB court ruling opens the flood gates

Vol 22, PW 8 (07 Feb 19) Midstream & Downstream

Expect more legal challenges against the PNGRB from private companies who began gas retail operations before the regulator was set up following a landmark Supreme Court ruling in favour of Adani Gas on January 29.

Justices Arun Mishra and Vineet Saran struck down orders issued by the PNGRB and the Rajasthan state government in 2011 restricting the expansion of CGD networks in Jaipur and Udaipur built by Adani which received state government permission back in 2005. Describing the Rajasthan order as "unfair and unjust" and the PNGRB order as "illegal" the court directed the gas regulator to take a "fresh decision" within four weeks after hearing Adani Gas.

Analysts predict Adani and fellow private sector CGD operator SKN-Haryana City Gas will now demand the PNGRB reconsider longstanding requests for formal authorisation in cities where they were allowed to work by state governments before the Petroleum and Natural Gas Regulatory Board Act, 2006 became law. For instance in 2005-06, Adani was permitted by Uttar Pradesh authorities to work in Lucknow, Noida and Khurja.

Also in 2005, Haryana authorities allowed Haryana City Gas to set up a CGD network in Gurgaon and Adani to set up a network in Faridabad. But the PNGRB blocked Adani’s request for Lucknow in favour of state-promoted Green Gas but allowed Adani to work in Khurja.

Likewise state-promoted IGL began working in Noida, Faridabad and Gurgaon, claiming it received central government approval on April 8, 2004.