Regulator says IGL’s exclusivity in Delhi ended four years back
The Petroleum Natural Gas Regulatory Board (PNGRB) has ordered that the exclusivity period of Indraprastha Gas Ltd (IGL) for city gas-distribution business in the National Capital Region of Delhi has ended. The order saw IGL shares on the Bombay stock Exchange plunging to Rs 517 in early trade after opening at Rs 563.
The company, which has monopoly in the city, however, said in a declaration to the stock exchange that the issue regarding ending of exclusivity of IGL in Delhi was sub-judice before the Delhi High Court and the court, in its September 30, 2015 order, “directed that any order passed by PNGRB shall be subject to further order of the court”. The scrip recovered partially after the statement.
The PNGRB in its order on Thursday said that after accepting the central government authorisation of IGL for Delhi CGD as a common carrier or contract carrier in 2009, the exclusivity period for National Capital Territory (NCT) expired on January 1, 2012.
The board further said it was in the process of declaring city or local natural gas-distribution networks in accordance with provisions of Section 20 of the PNGRB Act. It dismissed IGL’s petition that contented that the procedure for common carrier and contract carrier was not being followed by the board. Under Section, PNGRB is authorised to declare a CGD network in a geographical area as common carrier or contract carrier after following due procedure.
The Act provides exclusivity of five years to new players and three years to the existing players, and since the government authorisation for IGL was sent by the ministry of petroleum and natural gas in 2009, IGL’s exclusivity ended in 2012.
Incorporated in 1998, IGL took over Delhi City Gas Distribution Project in 1999 from GAIL (India) Ltd.
The project was started to lay the network for the distribution of natural gas in the NCT of Delhi to consumers in the domestic, transport, and commercial sectors. The company promoted by GAIL (India) and Bharat Petroleum Corporation Ltd (BPCL) has been at odds with PNGRB ever since the regulatory board was set up in 2006.
