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Oil ministry wants to curb watchdog

business Updated: Jan 19, 2010 22:13 IST
Anupama Airy

The dutiful exertions of the petroleum sector watchdog have not found favour with its master — the petroleum ministry, which intends to leash it.

The ministry has decided to curb the powers of Petroleum and Natural Gas Regulatory Board (PNGRB) and has proposed taking away its right to question the government’s policies and decisions.

The regulator has repeatedly questioned the petroleum ministry on its policy of keeping petrol and diesel prices unchanged in the light of rising raw material (crude oil) prices.

“The power of the government to supersede the board (regulator) is a provision which exists in case of almost all regulators. These provisions, however, are absent in the PNGRB Act, 2006,” said a cabinet note moved by the petroleum ministry for comments of other ministries, citing the SEBI Act, IRDA Act and the Competition Act, 2002 .

“An amendment is required to be provided for the fact that government policy and decisions, as also actions taken by entities in compliance of these, cannot be adjudicated by the Board,” the note said.

“In the absence of such an explicit provision in the Act, policies of Government and activities pursuant to such policies can be questioned by the Board under the Act.”

The regulator is presently hearing a complaint filed by Reliance Industries Limited, Essar Oil Limited & Shell India Marketing Private Limited against state-owned oil marketing companies — Indian Oil Corporation Limited, Bharat Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited — for their selling of petrol and diesel below the cost prices.

As the policy on petroleum products’ pricing has caused loss of marketing revenue to the state-owned marketing entities, PNGRB had questioned this policy of the government.

Asked to comment, L Mansingh, Chairman of PNGRB told Hindustan Times, “I have also received the note. I am not in a position to say anything immediately but we are studying the matter and will file our replies shortly.”

Another senior official in PNGRB said, “The regulator’s move to question the government is well within the purview of the PNGRB Act, 2006 and Chapter V of the Act empowers the regulator to adjudicate (on) disputes and complaints between entities.”