In a big relief to Indraprastha Gas Ltd (IGL), the Delhi High Court on Friday ruled against the order by the downstream oil regulator the Petroleum and Natural Gas Regulatory Board (PNGRB), which had slashed the network tariff and compression charges levied by IGL for distributing CNG to consumers in Delhi and adjoining areas with retrospective effect.
Ruling in IGL’s favour, the court made it clear that the regulator had no jurisdiction over setting gas tariffs. The order assumes significance as the same also applies to all other CNG distributing companies across India.
Following the news, the IGL stock rallied and closed 28% higher on the Bombay Stock Exchange on Friday.After the PNGRB order of April 9, the stock has been consolidating in the Rs 192-245 band.
The board, in its order, had asked IGL to cut down its network tariff by 63% with retrospective effect. It had also asked the company to refund the difference to its customers for the period from April 1, 2008 till the date of issuance of order.
On its part, IGL has maintained that the PNGRB is not entitled to regulate the price of gas sold by the company and the variables taken into account by the board to calculate the network tariff are misleading.