NEW DELHI 17/NOV/2014: The government is backing distributor Indraprastha Gas LtdBSE 0.08 % (IGL) in the Supreme Court in its dispute against the Petroleum and Natural Gas Regulatory Board (PNGRB) over transportation tariffs for the fuel supplied in Delhi through pipelines. The outcome of the case will likely determine the future of the regulator when it comes to regulating prices of compressed natural gas delivered to vehicles and piped natural gas to homes in the city. A Supreme Court bench comprising justices Dipak Misra and UU Lalit will take a call on the rival arguments. The regulator issued a notification in April 9, 2012, fixing network tariffs and compression charges to be levied by IGL with effect from April 1, 2008. It also asked IGL, which has a monopoly over gas distribution in Delhi, Noida, Ghaziabad and Greater Noida, to reveal these two specific components to consumers in its invoices in the interests of transparency. IGL challenged this in the Delhi High Court and won. It argued that it cannot be forced to reveal cost components as this was commercial information and contested the board\'s powers on this score.
The board said Indraprastha Gas had always submitted tariff data to it and this was part of the process of fixing these two components. But the high court ruled that since the government had not yet notified Section 11(e) which empowers the board to monitor natural gas prices of the Act under the Acts. IGL, through senior advocate Harish N Salve, has resisted this, arguing that when the board cannot fix prices, it cannot set a component of this either for a city or local gas distribution network. That would imply that the board has the power to decide something indirectly that it cannot do directly, according to the argument.
The gas regulatory board only has the power to ensure display of information on the maximum retail price, monitoring of rates to take corrective measures and prevention of restrictive trade practices, Salve said in his written submissions. The government has backed IGL, arguing that the board cannot fix the maximum retail price under the Act and that this will be decided by the company. The board can only monitor and regulate this. On the issue of whether the board can fix the transport tariff also, the ministry also backs Indraprastha Gas.