Don't expect the oil ministry to turn the other cheek

Vol 12, PW 3 (26 Jun 08) People & Policy

Nobody expected the oil ministry to tamely give in to the Board over who controls government-sponsored gas retailers like Indraprastha Gas and Mahanagar Gas.

Last week we hear the oil ministry sent a brief but carefully worded reply to the Board’s two-page letter on June 6. But unlike the regulator the ministry has chosen not to publicise its reply.

“This is an internal communication,â€‌ a ministry source tells us, when asked for details, “which is not for public consumption.â€‌ Though brief, the ministry reply is on strong legal ground.

Says a source: “The ministry intends to give directions to the Board under Section 42 (2) of the (Petroleum and Natural Gas Regulatory Board) Act.â€‌ The Board has been asked to submit its opinion to the ministry before any â€کformal’ direction is given on whether companies like IGL and MGL were â€کauthorised’ before the Act was passed by parliament.

In effect, says an observer, “the ministry is telling the Board that under the Act it is still the boss, even though the Board is in existence.â€‌ Key to the ministry reply is Section 42, dealing with the â€کPower of Central Government to issue directions’.

See below: آ· (1) Central Government may, from time to time, by writing issue to the Board such directions as it may think necessary in the interest of the sovereignty and integrity of India, the security of the State, friendly relations with foreign States or public order آ· (2) Without prejudice to the foregoing provision, the Central Government may, if it finds necessary or expedient so to do in the public interest or for maintaining or increasing supplies of petroleum, petroleum products or natural gas or all or any of them or for securing their equitable distribution and ensuring adequate availability, issue policy directives to the Board in writing and such policy directives shall be binding on the Board آ· Provided that no such directive shall relate to any day-to-day affairs of the Board آ· Provided further that the Board shall, as far as practicable, be given an opportunity of expressing its views before any directive is issued under this sub-section آ· (3) The decision of the Central Government whether a question is one of policy or not shall be final