The Hindu Business Line : Decks cleared for petro regulatory board

Key functions
To perform three functions — protect the interest of consumers, seek to boost investments and create competitive markets.
To look into cooking gas shortage.

New Delhi , March 22

Decks were cleared for the setting up of a regulatory board for the downstream petroleum and natural gas sector with the passage of the Petroleum and Natural Gas Regulatory Board Bill by the Lok Sabha.

The Upper House had passed the legislation earlier; the Bill envisages the setting up of an independent regulatory mechanism to regulate refining, processing, storage, transportation, distribution, marketing and sale of petroleum production and natural gas.

Main functions

The Petroleum Minister, Mr Murli Deora, while winding up the discussions on the Bill said that the board would essentially perform three functions — protect the interest of consumers, seek to boost investments and create competitive markets.

In response to concerns raised by the members pertaining to adulteration of petroleum products, Mr Deora said that the board had powers to tackle the problem. A meeting of the state-owned oil companies was held in Mumbai recently to look into the issue, he said.

LPG shortfall

The Petroleum Minister also assured the House that the Government was working to address the shortfall in cooking gas (LPG cylinder), which hit many States, and that the board too would look into the issue.

Another aspect that the regulatory board will look into is uninterrupted and adequate supply of petroleum and petroleum products and natural gas. As this sector is increasingly getting deregulated, the proposed regulator will prevent exploitation of consumers and provide a mechanism to ensure supply of petroleum products at fair prices, the Minister said.

Service obligations

The Bill also entails provision of retail service obligations for the retail outlets and marketing service obligations for the players in the petroleum and gas sector.

The Bill also empowers the board to register entities that propose to establish storage facilities for petroleum, petroleum products and natural gas beyond a certain capacity.

Appropriate provisions have been incorporated in the Bill that specifically pertain to the gas sector. These relate to affiliate code of conduct, pipeline access code, introduction of the concept of contract carrier, marketing service obligations of the city or local gas distribution entities, and methodology for fixation of transportation tariffs.

Further, the Bill also proposes to have a member legislation/judicial on the board, introduce the concept of `restrictive trade practice' instead of `profiteering', a common appellate tribunal for the electricity and petroleum sectors, deleting the exclusion of jurisdiction of the MRTP Commission or Competition Commission.

It empowers the board to register, instead of authorise, the entities seeking to market petroleum products and setting up liquefied natural gas terminals.