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Oil regulator given wide-ranging powers

BS Energy Editor

The Downstream Petroleum Sector Regulatory Board Bill, cleared by the Cabinet today, provides the regulator with wide-ranging powers to fix the ceiling prices for motor spirit and high-speed diesel and to regulate and monitor access to the common carrier systems.

The Bill provides the regulatory board with powers to put a cap on the retail prices of motor spirit and high-speed diesel "to prevent price profiteering, avoid abnormal fluctuation in prices and to promote competitive markets".

The Bill, expected to be introduced in Parliament during the current session, empowers the board to regulate and monitor access to the common carrier systems and lay down the guidelines for setting transportation tariffs for the existing and new pipelines, including natural gas pipelines and associated facilities.

The board will also set usage charges for hydrant systems and distribution charges of natural gas.

It will also have powers to grant, renew, suspend and cancel authorisation for laying and operating common carrier systems and associated facilities, including capacity expansion of existing pipelines.

Moreover, the board will ensure that liquefied natural gas terminals are located in accordance with the policy of the Central government.

The regulatory board, whose head office will be located in New Delhi, will consist of a chairperson and four members to be appointed by the Centre. It will facilitate smooth exchange of petroleum products and hospitality arrangements in case of disruption of supplies.

Any person aggrieved by any decision of the board can file an appeal in high court within 30 days from the date of communication of the decision. The high court, however, will have powers to extend the period of filing the appeal "within a further period not exceeding 60 days".

In case a person wilfully fails to comply with any decision, direction or order of the high court, he will be liable to a penalty to be imposed by the high court that may go up to Rs 50 million.

The amount received by the board as penalty, will be credited to the Consolidated Fund of India.

The Bill grants the Central government powers to intervene whenever the board fails in matters of policy relating to the downstream petroleum sector.

"The decision of the Central government, whether a question is one of policy or not, shall be final," the Bill emphasises.

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