The Author, Bhargabi Kundu, is a final year student pursuing a B.A.LL.B. (H) from South Calcutta Law College, University of Calcutta.

About Petroleum and Natural Gas Regulatory Board, 2006:

The Petroleum and Natural Gas Regulatory Board (PNGRB) was constituted under The Petroleum and Natural Gas Regulatory Board Act, 2006 (NO. 19 OF 2006) notified via Gazette Notification dated 31st March, 2006.

The Act provides for establishing the Petroleum and Natural Gas Regulatory Board to protect the interests of consumers and entities engaged in specified activities relating to petroleum, petroleum products and natural gas and to promote competitive markets and for matters connected therewith or incidental thereto.

Further, as enshrined in the act, the board has also been mandated to regulate the refining, processing, storage, transportation, distribution, marketing and sale of petroleum, petroleum products and natural gas, excluding the production of crude oil and natural gas so as and to ensure uninterrupted and adequate supply of petroleum, petroleum products and natural gas in all parts of the country.

  1. What is “auto liquified petroleum gas” under the Petroleum and Natural Gas Regulatory Board, 2006?

Ans. Section 2( e) of the Act of 2006 defines it as a blend of certain light hydrocarbons which are in a gaseous state at normal temperature and atmospheric pressure and is primarily derived from petroleum but may be condensed to liquid at normal ambient temperature by the use of moderate pressure.

  1. Who can be appointed as the Chairperson of the Board?

Ans. A chairperson can be appointed by the Central Government from amongst persons of eminence in the fields of petroleum and natural gas industry, management, finance, law, administration or consumer affairs. Further for the selection of Chairperson and for preparing a panel for the appointment of Technical Member of the Appellate Tribunal, the Committee will constitute of Chairperson who will be the member, Planning Commission in charge of the energy sector.

  1. What is the tenure of the Chairperson of the Board?

Ans. The Chairperson shall hold office for a term of five years from the date on which he join the office or until the age of sixty-five years, whichever is earlier, The chairperson shall not be eligible for re-appointment.

  1. What are the powers of the Chairperson?

Ans. The chairperson shall have the following powers:-

  1. General superintendence and directions in the conduct of the affairs of the Board.
  2. Shall preside over the meetings.
  3. exercise and discharge such other powers and functions assigned to him by the Board.
  1. Can a chairperson be removed from office?

Ans. The Central Government may remove from office the Chairperson or any other member, who-

(a) has been adjudged as insolvent; or

(b) has been convicted of an offence which, in the opinion of the Central Government, involves moral turpitude; or

(c) has become physically or mentally incapable of acting as a member; or

(d) has acquired such financial or other interest as is likely to affect prejudicially his functions as a member; or

(e) has so abused his position as to render his continuance in office prejudicial to the public interest.

No Chairperson or other member shall be removed from office who has acquired financial or any other interest and be prejudice or has abused his position unless the Central Government, after holding an inquiry is satisfied that such person ought on such ground or grounds to be removed.

  1. What happens if the Chairperson fails to preside over the meetings?

Ans. If the Chairperson is unable to preside over the meetings of the Board then the senior-most member reckoned from the date of appointment to the Board, shall preside at the meeting. If the date of appointment of the members are the same then the member senior in age shall be considered as senior.

  1. How does the Board function in regard to registering and authorising the entities.

Ans. The Board has the function in regard to register and authorise entities. The Board registers entities to

(i) market notified petroleum and petroleum products and, subject to the contractual obligations of the Central Government, natural gas;

(ii) establish and operate liquefied natural gas terminals;

(iii) establish storage facilities for petroleum, petroleum products or natural gas exceeding such capacity as may be specified by regulations;

Further the Board authorise entities to-

  1. lay, build, operate or expand a common carrier or contract carrier;
  2. lay, build, operate or expand city or local natural gas distribution network;
  1. Does the Board has any jurisdiction?

Ans. The Board shall have the jurisdiction to adjudicate upon and decide any dispute or matter arising amongst entities or between an entity and any other person on issues relating to refining, processing, storage, transportation, distribution, marketing and sale of petroleum, petroleum products and natural gas according to the provisions of Chapter V, unless the parties have agreed for arbitration.

On receiving a complaint, the Board can carry out the investigation in connection with petroleum and natural gas products on contravention of retail service, marketing services obligations and display of retail price at retail outlets.

While deciding a complaint, the Board may pass such orders and issue such directions as it deems fit or refer the matter for investigation according to the provisions of Chapter V.

Q. How does the Board discharge their function on receiving complaints ?

Ans. The Board has the same powers as are vested in a civil court under CPC. The Board follows the following procedure while trying suit-

(a) summoning and enforcing the attendance of any person and examining him on oath;

(b) subject to the provisions of sections 123 and 124 of the Indian Evidence Act, 1872 (1 of 1872), requisitioning any public record or document or a copy of such record or document, from any office and production of such documents;

(c) receiving evidence on affidavits;

(d) issuing commissions for the examination of witnesses or documents;

(e) dismissing an application for default or deciding it, ex parte;

(f) setting aside any order of dismissal of any application for default or any order passed by it, ex parte;

(g) granting interim relief;

(h) reviewing its decision; and

(i) any other matter which may be prescribed.

Further every proceeding before the board should be a judicial proceeding within the meaning of provisions 193 and 228, and for the purposes of section 196, of the IPC and the Board shall be deemed to be a civil court for the purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973.

Q. What are the entities that the Petroleum and Natural Gas Regulatory Board can register and authorise?

Ans. The details of the entities which are registered for-

  1. marketing notified petroleum, petroleum products or natural gas, or
  2. establishing and operating liquefied natural gas terminals, or
  3. establishing storage facilities for petroleum, petroleum products or natural gas exceeding such capacity as may be specified by regulations.

The details of the entities which are authorised for-

  1. laying, building, operating or expanding a common carrier, or
  2. laying, building, operating or expanding a city or local natural gas distribution network, as may be provided by the Board by regulations.

Q. Who has the “Right to first use”?

Ans. 1. The entity

  1. laying, building, operating or expanding a pipeline for transportation of petroleum and petroleum products or
  2. laying, building, operating or expanding a city or local natural gas distribution network

shall have right of first use for its own requirement and the remaining capacity shall be used amongst entities as the Board may, after issuing a declaration under Section 20, determine having regard to the needs of fair competition in marketing and availability of petroleum and petroleum products throughout the country.

Further, it is stated that in case of an entity engaged in both marketing of natural gas and laying, building, operating or expanding a pipeline for transportation of natural gas on common carrier or contract carrier basis, the Board shall require such entities to comply with the affiliate code of conduct as may be specified by regulations and may require such entity to separate the activities of marketing of natural gas and the transportation including ownership of the pipeline within such period as may be allowed by the Board and only within the said period, such entity shall have right of first use.

2. An entity other than an entity authorised to operate shall pay transportation rate for use of common carrier or contract carrier to the entity operating it as an authorised entity.

3. An entity authorised to lay, build, operate or expand a pipeline as common carrier or contract carrier or to lay, build, operate or expand a city or local natural gas distribution network shall be entitled to institute proceedings before the Board to prevent, or to recover damages for, the infringement of any right relating to authorisation.

 

Q. To what things, transportation tariffs are implemented?

Ans. The Board shall lay down, by regulations, the transportation tariffs for common carriers or contract carriers or city or local natural gas distribution network and the manner of determining such tariffs.

 

Q. Do the Board has any power to suspend or cancel the authorisation?

Ans. On an application received by the affected party or on its own motion, if the Board is satisfied that the entity in favour of which authorisation has been granted under section 19 has failed to comply with any conditions of authorisation, it may, after giving an opportunity to such entity of being heard, either suspend the authorisation for such period as the Board may think fit or cancel the authorisation.

Further, if the Board is of the opinion that an authorised entity persistently acts in a manner prejudicial to the interests of consumers, it may take action for the suspension of the authorisation immediately subject to the opportunity of hearing being given subsequently, after which action so taken may be confirmed or revoked.

Q. Who are responsible for settling of disputes?

Ans. Chapter V of the Act deals with the settlement of the disputes. A bench consisting of a member (Legal) and one or more member(s) as nominated by the Chairperson shall settle the disputes under this Act. 

Q. Who can file complaint before the Board?

Ans. According to Section 25 of the Act, any person can file the complaint before the Board in regard to any dispute arising between the entities or any matter of the entities or any other matter relating to the provisions of the Act.

Q. What is the limitation period in regard to filing of the complaint?

Ans. The complaint must be filed within sixty days from the date of any contravention, act, or any conduct that took place. The complaint shall be accompanied by fees as provided under the regulation. 

Q. What is the limitation period for the Board to take action against the complaint?

Ans. On receipt of a complaint under Section 25(1), the Board shall decide within thirty days whether there is a prima facie case against the entity or entities concerned and may either conduct enquiry on its own or refer the matter for investigation.

Q. What power do the Board has if any person contravenes the Board’s directions?

Ans. If any person contravenes any directions of the Board then the Board is empowered to impose a civil penalty on that person and the order passed by the Board call be deemed to be a decree.

Q. What factors needs to be taken into consideration while deciding any dispute?

Ans. Section 27 of the Act states certain factors that the Board takes into account while deciding any dispute. The factors are

  1. Amount of inappropriate gain and unfair advantage obtained because of a default,
  2. Amount of loss suffered by an entity because of a default, and
  3. The repetitive nature of the default.

Q. Are orders passed by the Board deemed to be decrees?

Ans. Every order made by the Board under this Act shall, on a certificate issued by an officer of the Board, shall be executable in the same manner as if it were a decree of a civil court. But where an appeal lies against an order of the Board and no appeal is preferred then the order of the Board shall be deemed to be a final decree under this section on the expiry of the period allowed for preferring an appeal against such order before the Appellate Tribunal.

Q. Which Appellate Tribunal shall be for the PNGRB Act?

Ans. Section 30(1) states that the Appellate Tribunal established under section 110 of the Electricity Act, 2003 (36 of 2003) shall be the Appellate Tribunal for the purposes of this Act and the said Appellate Tribunal shall exercise the jurisdiction, powers and authority conferred on it by or under this Act.

Q. Who shall be appointed in the Appellate Tribunal?

Ans. The Central Government has the power to appoint one or more Technical Members (Petroleum and Natural Gas) in the Appellate Tribunal, or designate a Technical Member of the Electricity Appellate Tribunal as Technical Member (Petroleum and Natural Gas). 

Q. What are the qualifications that the technical member of the Petroleum and Natural Gas shall possess?

Ans. Section 31(2) states that the person shall be qualified if-

  1. He is or was a secretary for at least one year in the Ministry or Department of the Central Government having adequate experience in energy sector, especially in matters relating to Petroleum and Natural Gas sector; or
  2. He is or was a person of ability and standing, having adequate knowledge or experience in dealing with matters relating to exploration, production, transmission pipelines, marketing or regulation of petroleum, petroleum products or natural gas, economics, commerce, law or management.

Q. What is the limitation period of the appeal to be made to the Appellate Tribunal?

Ans. The appeal must be made within 30 days from the date on which the person received a copy of the order or decision. The Appellate Tribunal shall dispose of the appeal within 90 days. 

Q. What will be the scenario of supply of business in case of war or natural calamity ?

Ans. In the event of war or natural calamity or such other similar circumstances leading to disruption of supply of petroleum, petroleum products or natural gas, the Central Government may, for ensuring the continuous supply of petroleum, petroleum products or natural gas, by notification, either take over the control and management of any storage site, facilities and business premises of any entity and retail outlets or suspend its operations or entrust, to any agency of the Central or State Government for such time.

Q. What is the punishment provided if anyone contravenes any direction of the Board?

Ans.  If any person contravenes any direction of the orders given by the Board, then the penalty of rupees twenty-five crores is imposed, and in case of continuing contravention, an additional fine of ten lakh every day during the contravention period. 

Q. What is the punishment given to a person who fails to comply to Tribunal’s order?

Ans. If any person wilfully fails to comply with the orders of the Appellate Tribunal, then the penalty of one crore rupees is imposed, and in case of continuing contravention, an additional fine that may extend to two crore rupees for every day till the contravention continues.

Q. What is the punishment given to a person who build or operates unauthorized carrier or a local natural gas distribution network?

Ans. If a person lays, build, operates, or expands unauthorized common carrier, or contract carrier, or a city or local natural gas distribution network, then he shall be punished with an imprisonment maximum of three years or a fine of rupees twenty-five crores or both, and in case of continuing contravention, an additional fine of rupees ten lakh per day.

Q. What if a person operates an unregistered natural gas terminal?

Ans. If a person establishes or operates an unregistered liquified natural gas terminal, then he shall be punished with imprisonment that may extend till 3 years or fine of rupees twenty-five crores or both, and in case of continuous operation, an additional fine of ten lakh rupees per day.

Q. Will the civil courts have any jurisdiction to entertain any suit?

Ans. No civil court shall have jurisdiction to entertain any suit or proceeding in respect of any matter which the Board or the Appellate Tribunal is empowered by or under this Act to determine, and no injunction shall be granted by any court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act.

Q. What is meant by transitional arrangements?

Ans. An agreement or agreements which have been entered into between one oil company and another for the purpose of sharing of petroleum products or sharing of infrastructure facilities among the oil companies and which have been approved by the Central Government and the Board may monitor the implementation of such agreements for the transition period.

Q. What is the “transition period”?

Ans. "Transition period" shall mean a period of three years from the date of commencement of this Act.

Q. What is meant by “infrastructure facilities”?

Ans. "Infrastructure facilities" shall mean facilities at ports, refineries, terminals, depots and aviation fuelling stations including hydrant lines and shall include loading and unloading facilities.

Picture Source :

 
Bhargabi Kundu