The Hindu Business Line : States told to stop setting up hydrocarbon regulatory bodies

The Supreme Court had said that only the Centre had the authority to enact legislation relating to mineral and oil resources, including natural gas and liquefied natural gas.

New Delhi , Oct. 6

THE Centre has asked State governments to desist from setting up regulatory authorities for the petroleum sector, as the hydrocarbons sector is a Central subject, and has also told them that such moves on their part violated the orders of the Supreme Court.

Official sources said that the Ministry of Petroleum and Natural Gas has written to the governments of Uttar Pradesh and Haryana asking them to withdraw their advertisements, which propose the setting up of a regulator for the sector.

Similar to the legislation proposed by the Gujarat Government, the draft Uttar Pradesh Gas Uses and Distribution Policy 2005 seeks to regulate the transmission, supply and distribution of gas for use in transport and domestic purposes, and to promote the gas industry in the State. The State Government does not have the mandate to bring in such legislation, the official said.

Violation of SC order: Stating that this was a violation of the apex court's order, official sources told Business Line that in its March ruling against the Gujarat Government's move to enact a legislation for regulation of natural gas distribution and transmission, the court had said that the hydrocarbons sector was a Central subject.

Striking down the legislation proposed by the Gujarat Government, the Supreme Court had said that only the Centre had the authority to enact legislation relating to mineral and oil resources, including natural gas and liquefied natural gas. The court had also stated that the Centre alone had the competence to enact such a law.

UP plan: The draft legislation posted on the Web site of the Uttar Pradesh State Industrial Development Corporation (UPSIDC) states that the State Government would constitute a Uttar Pradesh State Gas Development and Regulatory Board to provide a regulatory framework for the promotion of gas-based industry and to facilitate investment in this sector for energy security of the State. The draft policy also states that till the regulatory board is set up, the UPSIDC would be designated the regulatory body.

Regulatory board: Asked about the status of the proposed Petroleum and Natural Gas Regulatory Board to be set up by the Petroleum Ministry, the sources said that after due deliberation by a Committee of Secretaries, the Bill proposing the setting up of the board had been sent to the Group of Ministers.

The Petroleum Ministry has been waiting for over two years for the passage of Central legislation to set up the board.

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