The petroleum ministry plans to challenge the authority of the Petroleum and Natural Gas Regulatory Board (P&NGRB) that it has powers to authorise gas distribution activities only after it came into being and not from retrospective effect. The regulator had on March 31 this year said that Indraprastha Gas Limited (IGL) was not an authorised entity to distribute gas in the National Capital Region.

The proposed move may bring relief to all city gas distribution companies having central government approval before the appointment day of P&NGRB. Such companies may not be required to apply to the board for authorisation, but simply furnish the details of their activities.

Once this is conveyed to the board officially by the oil ministry, IGL can start its expansion of CNG and PNG network in Delhi and the adjoining regions. IGL plans to double spending on expansion activities in the NCR this fiscal. Last fiscal, it had spent about Rs 100 crore. IGL stopped expansion activities in Delhi after the regulator raised objections. The regulator was not satisfied with 10-year-old government letters and notifications that finally led to the establishment of IGL. It had hence demanded a specific authorisation letter for the start of a city gas distribution work.

To avoid a conflict with the regulator, GAIL today announced a decision to float a 100 per cent arm for gas distribution under the name of GAIL Gas Ltd with capital of Rs 200 crores. GAIL plans to distributed gas in 40 cities.