Regulator asks IGL to slash CNG rate
Artistes from Mizoram perform during the launch of P.A. Sangma’s book Life in Politics in New Delhi on Tuesday.
Oil regulator Petroleum and Natural Gas Regulatory Board (PNGRB) has asked the Indraprastha Gas Limited (IGL) to slash prices of CNG and piped cooking gas to households in Delhi as it has not agreed with the network tariff and compression charges imposed by the company. What is more damaging for the IGL, which is the sole supplier of CNG and piped cooking gas in Delhi and surrounding NCR region, is that the PNGRB has asked it to refund the excess money to the automobiles and houses which the company has charged since April 2008.
However, don’t expect any change in prices soon as the IGL has challenged the order in high court.
The company is charging a network tariff charge of `104.05 per million British thermal unit on the gas sold, while PNGRB in an order on Monday approved it to be at `38.58 mmBtu. As far as compression charge is concerned the IGL had put it at `6.66 per kilogram, while board has approved it to be only `2.75 per kilogram.
“The IGL has approached Delhi high court where it has challenged the constitutionality and legality of the powers of the PNGRB to fix the tariff,” said IGL managing director M. Ravindran.
The IGL said the PNGRB has not considered the numbers provided by the company and has used own presumptions while finalising the order. It said that the regulator did not discuss issues with the IGL before notification was issued.
The IGL also said that it was difficult to give money back to the automobiles which fill gas from their stations as ordered by the PNGRB.
“Entire business of CNG and PNG is a retail, cash and carry business. There are no identified customers. There are no provisions in the regulations to do retrospective return of the tariffs. These are all against provisions of the Act,” said Mr Ravindran.
Analysts are expecting potentially impacted of the order to the tune of `1,000 crores to `1,700 crores in past dues. IGL shares were down by 33.66 per cent on the Bombay Stock Exchange at `229.80 a share.
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