Ministry to revamp oil and gas regulatory board to minimise conflict

| Updated on: Jan 12, 2018

PNGRB withdraws objections to Jagdishpur-Haldia pipeline

The government will issue directives to the Petroleum and Natural Gas Regulatory Board for minimising conflicts and also ‘streamline the working’ of the regulator.

For this the government will not have to amend the PNGRB Act, two top Oil Ministry officials told BusinessLine.

A senior official said that the functioning of the PNGRB will continue to be as per the existing PNGRB Act and that the government will restructure the regulator’s working and clearly define powers.

Another official added that the government will be “looking at working more closely with the PNGRB to streamline its role in consonance with the government’s vision”.

PNGRB ran into trouble with the Ministry and Indraprastha Gas Ltd after the regulator had attempted to fix retail price of compressed natural gas and piped natural gas. A July 2015 Supreme Court verdict put this controversy to rest and noted that the power to fix tariff was not vested with the board.

A PNGRB official said that the government will soon come up with a notification vesting the regulator with penal powers in consonance with the Supreme Court’s verdict.

Changing stance

The regulator’s change in stance is evident as it has now withdrawn its objections to the Jagdishpur-Haldia/Bokaro-Dhamra gas pipeline. In November last year that the regulator had locked horns with the government when it red-flagged a portion of GAIL (India) Ltd’s pipeline.

PNGRB had opposed the Centre’s order to grant GAIL the rights to develop the eastern gas grid by avoiding the competitive bidding route. PNGRB had said that such authorisation would need an amendment of Section 42 of the PNGRB Act, as it contradicted the objectives of regulation and infringed upon the regulator’s autonomy.

The regulator has now accepted that the Bokaro/Dhamra section is an extension of the Jagdishpur-Haldia pipeline and would not be requiring its approval as the project was conceived before the regulator was instituted.

According to the PNGRB Act, pipeline networks conceived and approved before the regulator was instituted in 2006 are exempt from the framed rules.

But, this is just the tip of the iceberg for the regulator. There is only one board member left within the PNGRB Board, resulting in a lack of quorum hampering the working of the institution. In the absence of a Member (Legal), the Board has been unable to suitably reply to judicial queries, according to a PNGRB official.

Published on February 16, 2017
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