Indraprastha Gas sparks regulator row with ministry

Vol 12, PW 1 (29 May 08) People & Policy
     

Who controls the gas retail sector Is it the oil ministry, or the new Petroleum and Natural Gas Regulatory Board, under the stewardship of Labanyendu Mansingh In our last issue oil secretary MS Srinivasan told us categorically he wants to see all powers divested from the ministry and delegated to the Board, by implication to Mansingh and his team of Members.

Why is this not happening PETROWATCH learns the Board is privately furious at a May 15 letter from the oil ministry, authorising Delhi-based Indraprastha Gas, a Bharat Petroleum and GAIL joint venture, to continue and expand its gas retail business in Delhi and the surrounding suburbs of Gurgaon, Faridabad and Noida. “Under the (Petroleum and Natural Gas Regulatory Board) Act the ministry cannot write such letters to us,â€‌ says a Board source angrily.

“Once the Board is set up it has all the powers to regulate the sector. The ministry cannot usurp the powers of the regulator and decide how the Act is to be applied.

â€‌ In its letter, the oil ministry writes that IGL requires no separate Board approval for existing activity or even if it decides to expand activity - a position firmly rejected by prominent Board sources. “We are bound by the Act and its provisions,â€‌ adds a Board source, “irrespective of the views of the government.

â€‌ If Indraprastha Gas is upset or feels unjustly treated by any of the Board’s decisions, we hear, it can go to the Appellate Tribunal, which has been set up precisely to hear cases where operators feel the Board is acting unfairly. “Nobody is saying the regulator is infallible.

â€‌ Last year, we hear, the Board wrote to the oil ministry pointedly asking for a list of companies with central government permission issued before the Board was set up with a Gazette notification on October 1 last year. Four months and six reminders later, the ministry replied with its May 15 letter.

“This letter does not tell us who is authorised,â€‌ we hear. “Except for one company: IGL.

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