After directing Indraprastha Gas to cut its tariffs and refund the excess amount charged to its customers, PNGRB has now asked the government to cancel the licence granted to RIL’s gas transportation arm

Oil and gas regulator, Petroleum and Natural Gas Regulatory Board (PNGRB), has asked the government to cancel licence granted to Reliance Gas Transportation Infrastructure (RGTIL) to lay four gas pipelines, saying the company has been dragging its feet on implementation of the 2,175-km pipelines, reports PTI.

Two months back the petroleum regulator had taken a strong view against Indraprastha Gas and had directed the city gas distributor to refund to consumers the excess amount charged since 2008.

Relogistics Infrastructure (Relog), a subsidiary of Mukesh Ambani's RGTIL, had in 2007-08 won government authorisation to lay Kakinada-Basudebpur-Howrah pipeline, Kakinada-Chennai line, Chennai-Bangalore-Mangalore pipeline and Chennai-Tuticorin line but physical work on these pipelines haven't yet started.

PNGRB has written to the oil ministry recommending cancellation of the authorisation over delays in implementation of the pipelines, a top official of the oil and gas regulator said.

"The board has taken a view of recommending cancellation of authorisation for the four pipelines. That has been communicated to the government," he said, adding the licences were given by the government prior to PNGRB began functional and so its cancellation can now be done only by the ministry.

Relog has cited uncertainty about availability of gas for not building the lines that as per the original authorisation were to be built in three years from date of all approvals. The three year period expires this month.

The official said Relog has also refused to furnish bank guarantee, which can be confiscated if the company did not complete the pipeline within the given timeframe.

In April this year, PNGRB slashed the network tariff and CNG compression charge Indraprastha Gas (IGL) billed on sale of piped cooking gas to households and CNG to automobiles in the national capital, by over 60% and asked the firm to refund to consumers the excess amount charged since 2008.
The Board in an 9th April order fixed IGL's pipeline network tariff at Rs38.58 per million metric British thermal unit (mmBtu) as against Rs104.05 per mmBtu proposed by the company. It also cut compression charge for CNG to Rs2.75 per kg from Rs6.66 per kg submitted by IGL. PNGRB said the new charges would be applicable from 1 April 2008.

While the Delhi High Court has quashed the order of PNGRB against IGL, the Board is set to move the Supreme Court against the high court's decision.