Have power to frame CNG tariff rules, regulator tells court (Lead)

May 22nd, 2012 - 11:25 pm ICT by IANS  

New Delhi, April 22 (IANS) The Petroleum and Natural Gas Regulatory Board Tuesday told the Delhi High Court that it has the power to frame tariff regulations for Indraprastha Gas Limited (IGL) that distributes compressed natural gas (CNG) and piped gas in Delhi and adjoining region.

IGL had moved court contending that the regulatory board did not give it a hearing and calculated the tariff, announced April 9, on the basis of the 2008 price levels for various inputs and charges.

Additional Solicitor General A.S. Chandhiok, appearing for the regulator, told a bench of Acting Chief Justice A.K. Sikri and Justice R.S. Endlaw that “under the PNGRB Act the board is empowered to frame regulation and its is mandatory for IGL to follow the regulations”.

In order to protect the interest of consumers, the regulator stood by its April 9 order lowering, with retrospective effect, the network tariff and compression charges for CNG distributed by IGL.

“I am entitled to frame the regulations for the interest of consumer,” said Chandhiok clarifying that the regulator was only fixing the tariff and not the price.

The regulatory board, in its order of April 9, not only fixed the charges retrospectively applicable from April 1, 2008 but also ordered IGL to refund the excess amount charged from consumers since then.

Responding to IGL’s contention that it was not consulted before the tariff order was passed, the regulatory board earlier said that it had sought clarifications over data on capital and operating expenditure submitted by IGL in May 2009.

The regulator told the company to reduce its network tariff by 63 percent to Rs.38.58 per million British thermal units (mmBtu) as against Rs.104.05 per (mmBtu) sought by the company.

It also cut compression charge for CNG by 59 percent to Rs.2.75 per kg from Rs.6.66 per kg proposed by the company.

IGL in March hiked the prices of CNG in Delhi by Rs.1.70 a kg and Rs.1.90 per kg in Noida, citing a rise in input cost as the factor, in March.

The current price of CNG is Rs.35.45 a kg in Delhi and Rs.39.80 a kg in Noida, Greater Noida and Ghaziabad.

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