HC quashes regulator’s attempt to control IGL gas prices

The Delhi High Court today ruled in favour of city gas utility Indraprastha Gas Ltd (IGL), which had contested a directive from the state's petroleum and natural gas regulator (PNGRB) to cut tariffs for domestic gas.

The court upheld IGL's contention that PNGRB has no jurisdiction to fix rates or regulate tariff. It quashed the board's decision in April to regulate IGL's network tariff and compression charges (See: Indraprastha Gas challenges PNGRB order on natural gas tariff)  

The PNGRB had directed IGL to cut some tariffs by nearly 60 per cent; settling for now the uncertainty regarding margins that gas utilities are allowed to earn.

The court said PNGRB is not empowered to fix or regulate the maximum retail price at which gas is to be sold by IGL and other such entities.

The court ruling saw the shares of IGL and other city gas distribution companies like Gujarat Gas Co Ltd and Gujarat State Petronet shoot up by huge margins. While IGL shot up by nearly 30 per cent, Gujarat Gas and Petronet gained 14.62 per cent and 11.20 per cent respectively.

In its 9 April order, PNGRB had told asked IGL, the sole supplier of compressed natural gas in Delhi and the National Capital Region, to cut its network tariff by 63 per cent and compression charges by 53 per cent.