OREANDA-NEWS. April 18, 2012. The petroleum regulator's order that slashed tariffs of Indraprastha Gas Ltd and asked it to refund its customers will wipe out all its future earnings, the company told the High Court in a petition that also said that the regulatory authority had arbitrarily overstepped its jurisdiction.

The Petroleum and Natural Gas Regulatory Board (PNGRB) in its April 9 order asked IGL, the sole supplier of compressed natural gas in Delhi & NCR, to cut its network tariff by 63%. It also asked the firm to refund the difference to its customers for the period from April 1, 2008 till the date of issuance of order.

The company said it had incurred expenditure, invested money and spent on day-to-day operations. It had not kept aside money that can be refunded.

"Considering the estimated amount that the Petitioner would have to refund if the impugned order has to be implemented, then it would cause a huge financial strain on the petitioner and all future earnings, if any, will have to be spent towards making this payment. This would be extremely prejudicial to the Petitioner, its shareholders, the network, consumers and the industry as a whole," it said in the petition.

It also said the regulator had no authority to issue the order. "...there is no power conferred by PNGRB to determine network tariff and compression charges or final sale price of the gas supplied by a CGD entity."

Sources in PNGRB however said that the company's allegations were baseless because the company was notified since 2008 regarding this regulation.

"IGL participated in all the regulatory framework meetings and the bidding processes. If PNGRB does not have the power to regulate the tariff, how come the company is accessing the board's approved gas transmission network?" said a former official of PNGRB on the condition of anonymity. IGL moved high court on April 10, 2012 challenging the constitutionality and the legality of the powers of the PNGRB to fix the tariff and also raised doubts over PNGRB Act 2006.