PNGRB: India’s Downstream Oil and Gas Regulator

What is PNGRB?

PNGRB is India’s downstream oil and gas regulator. This institution was established under the Petroleum and Natural Gas Regulatory Board Act, 2006. This act highlights the objective of the Petroleum and Natural Gas Regulatory Board.

According to the provisions of this act, the board has been entrusted with the responsibility of refining, processing, storage, transportation, distribution, marketing and sale of petroleum, petroleum products, and natural gas. It excludes production of crude oil and natural gas in order to protect the consumers’ interests and entities engaged in specified activities relating to petroleum, petroleum products, and natural gas. It is to ensure uninterrupted and adequate supply of petroleum, petroleum products, and natural gas in all regions of the nation and to promote markets that are competitive in nature.

To dig a little deeper into the PNGRB Act, click here.

Vision

In the year 2006, the Petroleum and Natural Gas Regulatory Board (PNGRB) was constituted in India with the powerful vision

“To create a vibrant energy market with rapid and orderly growth, through facilitation of flow of investments into the basic infrastructure for efficient transportation and distribution of petroleum, petroleum products and natural gas at minimum cost and high level of protection of consumer interests through fair trade practices and competition amongst the entities, so as to ensure the enhanced competitiveness of Indian economy and customer satisfaction.”

What are the functions of PNGRB?

The regulatory board performs the following functions:

(A) It protects the interests of consumers by encouraging fair trade and competition.

(B) It registers entities so that, they can effectively

1. market notified petroleum and petroleum products as per the contractual obligations of the Central Government, natural gas;
2. establish and operate terminals of liquefied natural gas;
3. establish storage facilities for petroleum, petroleum products or natural gas exceeding such capacity as may be specified by regulations.

(C) It authorizes entities for:

1. laying, building, operating or expanding a common carrier or contract carrier;
2. laying, building, operating or expanding city or local natural gas distribution network.

(D) It has the authority to declare pipelines as the common carrier or contract carrier.

(E) It regulates:

1. the access to the common carrier or contract carrier for fair trade and competition amongst entities and for that purpose specifies the pipeline access code;
2. the transportation rates for common carrier or contract carrier;
3. the access to city or local natural gas distribution network and ensures fair trade and competition amongst entities as per pipeline access code;

(F) With respect to the notified petroleum, petroleum products, and natural gas, the board:

1. ensures adequate availability;
2. ensures information display regarding the maximum retail prices fixed by the entity for consumers at retail outlets;
3. monitors prices and takes corrective measures for the prevention of restrictive trade practice by the entities;
4. secures equitable distribution for petroleum and petroleum products;
5. provides, by regulations, and enforces, retail service obligations for retail outlets and marketing service obligations for entities;
6. monitors the transportation rates and takes corrective measures to prevent restrictive trade practice by the entities.

(G) Levies fees and other charges as determined by regulations.

(H) Maintains a data bank of information on petroleum, petroleum products, and natural gas related activities.

(I) Puts down the technical standards and specifications including safety standards in activities relating to petroleum, petroleum products, and natural gas, including the construction and operation of pipeline and infrastructure projects related to downstream petroleum and natural gas sector.

(J) Performs such other functions as may be entrusted to it by the Central Government to carry out the provisions of the PNGRB Act.

(K) Determination of Marketing Margin Letter.

These functions reflect the large scale of responsibilities taken up by PNGRB and the importance of this regulatory authority in the downstream segment of the Indian oil and gas industry.

In a recent development, adding further to the significance of this establishment, PNGRB is all poised to take up the responsibility of market regulator for the natural gas sector as soon as the gas trading hub comes into being. Its role will be similar to that of SEBI in case of stock exchanges. With this prime gas trading hub, ‘the idea is to create an ecosystem where the competing buyers would be able to buy gas from competing sellers and transport the same from gas source to the place of their requirement by getting a non-discriminatory access to the pipeline capacity. This end-to-end solution would reduce customer risk and enhance customer confidence on gas as an alternate fuel and feed’.

To further explore, what’s new at PNGRB, click here.

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