The Hindu Business Line : Petroleum regulatory board Bill passed

New Delhi, March 3, The Bill to set up a regulatory board for the downstream petroleum and natural gas sector was passed by the Rajya Sabha on Thursday.

The Petroleum and Natural Gas Regulatory Board Bill, 2005 envisages setting up of an independent regulatory mechanism with the objective of regulating the refining, processing, storage, transportation, distribution, marketing and sale of petroleum production and natural gas.

Another aspect that the board would look into is to ensure uninterrupted and adequate supply of petroleum and petroleum products and natural gas across the country. As this sector is increasingly getting deregulated, the proposed regulator will prevent exploitation of consumers and provide a mechanism for ensuring uninterrupted and adequate supply of petroleum products at fair prices, the Minister for Petroleum and Natural Gas, Mr Murli Deora, said.

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 Petroleum Regulatory Board Bill, 2002 was introduced in Lok Sabha on May 6, 2002. It was then referred to the Parliamentary Standing Committee on Petroleum and Chemicals. The committee presented its report on May 8, 2003 recommending that the Bill could be passed, subject to their recommendations and observations. The official amendments, as proposed by the committee were introduced in Lok Sabha in December 2003. However, the Bill could not be taken up for consideration and it lapsed. The Bill was again introduced in December 2005.

Proposed changes

Some of the amendments proposed include the provision to empower the board to register entities that propose to establish storage facilities for petroleum, petroleum and natural gas beyond a certain capacity. The standing committee had also recommended that the Government should lay down separate regulations incorporating provisions essential to handling the specific problems of the gas sector. The Government has agreed to this proposal, the Minister informed the House.

Appropriate provisions have been incorporated in the Bill, that specifically pertain to the gas sector, he said. These relate to affiliate code of conduct, pipeline access code, introduction of the concept of contract carrier, marketing service obligations of 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 also empowers the board to register, instead of authorise, the entities seeking to market petroleum products and setting up liquefied natural gas terminals.

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