Assam Gas gets tariff reprieve in PNGRB fight
Assam Gas has won an important victory against the PNGRB over backdated gas transportation tariffs.
On May 21 (2024), APTEL member technical Ashutosh Karnatak and member judicial Virender Bhat, in a 17-page order, said the PNGRB order of August 10 (2022) fixing the tariff for the Assam Natural Gas Pipeline (ANGPL) with effect from November 20 (2008) was "erroneous and unsustainable." Setting aside the PNGRB order, APTEL ruled: "We hold that the tariff determined by the PNGRB for ANGPL would be applicable from July 15 (2010)."
Assam Gas approached APTEL, challenging the PNGRB contention that a tariff determined on June 4 (2019) for its 104.73-km pipeline with a 5.5m cm/d capacity is applicable with effect from November 20 (2008), the date of the Tariff Regulations, 2008. Assam Gas was upset because of the low PNGRB tariff of Rs1.81/mmbtu ($0.02) fixed for July 1 (2019) to March 31 (2031), which was much lower than what Assam Gas charged its customers.
In comparison, the PNGRB tariff was Rs4.05/mmbtu ($0.04) on a Gross Calorific Value (GCV) for November 20 (2008) to March 31 (2014); and for April 1 (2014) to June 30 (2019), the PNGRB fixed a tariff at the same rate as what Assam Gas charged its customers over that period. Karnatak and Bhat said the PNGRB had no jurisdiction over gas pipelines operating as a common carrier or contract carrier before Section 16 of the PNGRB Act, 2006, was passed into law.
APTEL notes that the Act, except Section 16, came into force on October 1 (2007). Section 16 came into force on July 15 (2010).
"By virtue of Section 16, the PNGRB got jurisdiction over such gas pipelines and authority to determine tariff for these pipelines," notes the order. "Before July 15 (2010), it was the contractual rate agreed between the natural gas pipeline entity and the consumer, which prevailed; therefore, the PNGRB could determine tariff for such natural gas pipelines, including that of Assam Gas Company, only from July 15 (2010) and not before."