'Common carrier' may get legal status

PNGRR ACT TWEAKS ON THE CARDS New Delhi, 4 September A long-pending amendment to the Petroleum and Natural Gas Regulatory Board (PNGRB) Act, 2006, expected in the coming months, will give the sector regulator enough legal teeth to enforce its plan to reclassify natural gas pipelines as "common carriers", a top PNGRB official told Business Standard.

- SUBHAYAN CHAKRABORTY & SHREYA JAI

As a result, the ongoing tussle between PNGRB and aggrieved city gas distributors (CGDS) over the issue is soon feared to intensify after a lull. Legacy CGD players insist that the plan needs more clarity on operational grounds and staunchly maintain that they can't hand over access capacity to new entities without more details from the government.

The "common carrier" principle allows all producers and consumers access to fuel transport infrastructure by appointing independent gas pipeline operators. "Declaration of city gas pipeline networks as common carrier will bring in fresh investments, open the markets for competition and efficiency, and will lead to growth of the market size. This has been the experience in gas markets in other parts of the world," a senior official at PNGRB told Business Standard.

A series of legal actions initiated by PNGRB against legacy CGD players like Indraprastha Gas Ltd (IGL) in Delhi/NCR and Mahanagar Gas Ltd (MGL) in Maharashtra had been shot down at various courts. But the amended Act will give the regulator further legal backing. It provides for more clarity in how to deal with this barrage of litigations as well, the official stressed.

Inevitable tussle