Petroleum & Natural GasRegulations

Karthik MadhavanSCMHRD, Pune.

2

The Petroleum And Natural Gas Regulatory Board Act, 2006

The establishment of Petroleum and Natural Gas Regulatory Board.

To regulate

of petroleum, petroleum products and natural gas excluding production of crude oil and natural gas.

Refining Processing

Storage Transportation

Distribution Marketing & Sale

3

To protect the interests of consumers and entities engaged in specified activities relating to petroleum, petroleum products and natural gas

To ensure uninterrupted and adequate supply of petroleum, petroleum products and natural gas in all parts of the country

To promote competitive markets and for matters connected therewith or incidental thereto.

4

Functions of the Board

Protect the interest of consumers by fostering fair trade and competition amongst the entities;

Register entities to- market notified petroleum and petroleum products and,

subject to the contractual obligations of the Central Government, natural gas;

establish and operate liquefied natural gas terminals; establish storage facilities for petroleum, petroleum

products or natural gas exceeding such capacity as may be specified by regulations;

5

Authorise entities to- lay, build, operate or expand a common carrier or contract

carrier; lay, build, operate or expand city or local natural gas

distribution network; Declare pipelines as common carrier or contract

carrier; Regulate, by regulations,-

access to common carrier or contract carrier so as to ensure fair trade and competition amongst entities and for that purpose specify pipeline access code;

transportation rates for common carrier or contract carrier; access to city or local natural gas distribution network so as

to ensure fair trade and competition amongst entities as per pipeline access code;

6

In respect of notified petroleum, petroleum products and natural gas- ensure adequate availability; ensure display of information about the maximum retail

prices fixed by the entity for consumers at retail outlets; monitor prices and take corrective measures to prevent

restrictive trade practice by the entities; secure equitable distribution for petroleum and

petroleum products; provide, by regulations, and enforce, retail service

obligations for retail outlets and marketing service obligations for entities;

monitor transportation rates and take corrective action to prevent restrictive trade practice by the entities;

7

Levy fees and other charges as determined by regulations;

Maintain a data bank of information on activities relating to petroleum, petroleum products and natural gas;

Lay down, by regulations, 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;

Perform such other functions as may be entrusted to it by the Central Government to carry out the provisions of this Act.

Determination of Marketing Margin Letter

8

Powers of the Board

Adjudicate upon and decide any dispute or matter arising amongst entities

Receive any complaint from any person and conduct any inquiry and investigation

Pass orders and issue directions as it deems fit or refer the matter for investigation

Same powers as are vested in a civil court under the Code of Civil Procedure

Principles of natural justice and subject to other provisions of this Act

9

Registration & Authorization

Registered for- marketing notified petroleum, petroleum products or

natural gas, establishing and operating liquefied natural gas terminals, establishing storage facilities for petroleum, petroleum

products or natural gas exceeding such capacity as may be specified by regulations.

Authorised for - laying, building, operating or expanding a common carrier, laying, building, operating or expanding a city or local

natural gas distribution network, as may be provided by the Board by regulations.

10

City Gas Distribution

Declare a pipeline or city or local natural gas distribution network as a common carrier or contract carrier; or

Authorise an entity to lay, build, operate or expand a pipeline as a common carrier or contract carrier; or

Allow access to common carrier or contract carrier or city or local natural gas distribution network;

Authorise an entity to lay, build, operate or expand a city or local natural gas distribution network.

11

Transportation Tariff Factors which encourage competition, efficiency, economic use

of the resources, good performance, optimum investments; Safeguard the consumer interest; Recovery of cost of transportation in a reasonable manner; Rewarding efficiency in performance; Connection of compressors, pumps, metering units, storage to

the common carriers or contract carriers; Benchmarking against a reference tariff calculated based on

cost of service, IRR, NPV or alternate mode of transport; Policy of the central govt. applicable to common carrier,

contract carrier and city or local distribution natural gas network.

12

Settlement of Disputes

If any dispute arises, in respect of matters referred in the act, it’ll be resolved by a bench.

Complaint may be filed before the board by any person in respect of matters relating to entities or between entities on any matter arising out of the provisions of this act.

Board will appoint an Investigating Officer. Civil penalty for contravention of directions given by

the board. Orders passed by board deemed to be decrees.

13

Factors taken into account by the Board

The amount of disproportionate gain made or unfair advantage derived, wherever quantifiable, as a result of the default;

The amount of loss caused to an entity as a result of the default;

The repetitive nature of the default.

14

Appellate Tribunal

Appellate Tribunal of the Electricity Act, 2003 with technical members from P&NG.

Shall exercise the jurisdiction, powers and authority conferred on it by or under this Act.

Anyone can appeal aggrieved by the decision/order. Within 30 days of the decision/order. Endeavour is to dispose of the appeal finally within

90 days from the date of receipt.

15

The Appellate Tribunal can make rules consistent with the provisions of this Act as to the conduct and procedure in respect of all proceedings before it.

Orders passed by Appellate Tribunal to be executable as a decree.

Appeal to Supreme Court An appeal can be made against any order, not being an

interlocutory order, of the Appellate Tribunal to the Supreme Court.

No appeal shall lie against any decision or order made by the Appellate Tribunal with the consent of the parties.

Supreme Court may entertain the appeal after 90 days, if it is satisfied that the appellant was prevented by sufficient cause from preferring the appeal in time.

16

Finance, Accounts & Audit

The Govt. can grant a certain sum to the Board. Fund - all grants, fees, penalties and charges. Maintain proper accounts - prescribed by CAG. The accounts will by audited by CAG. Annual report –

summary of its activities. information relating to the proceedings and policies

during the previous years. contain statements of annual accounts of the Board.

17

Power of the Central Govt. Can issue directions in the interest of the

sovereignty, security & integrity of India, friendly relations with foreign States or public order.

Can issue policy directives to the Board for increasing, decreasing or maintaining equitable distribution of the supply.

Taking over control and management of facilities and business premises of any entity and retail outlets in public interest.

The decision of the Central Government whether a question is one of policy or not shall be final.

18

Offences & Punishment

Penalty for contravention of directions of the Board. Penalty for wilful failure to comply with orders of

Appellate Tribunal. Punishment for unauthorized activities. Punishment for wilful damages to common carrier

or contract carrier. In case of offenses by companies, the person-in-

charge is held responsible.

19

Miscellaneous

Maintenance of data bank and information. Obligations of entities to maintain documentary

records, allow inspection and commence operations after authorization.

No civil court shall have jurisdiction to entertain any suit.

Power to remove difficulties. To make rules and regulations (laid down before the

Parliament).

20

Other Acts & Rules The Petroleum Act, 1934An Act to consolidate and amend the law) relating to the import, transport, storage, production, refining and blending of petroleum [16th September, 1934] Whereas it is expedient to consolidate and amend the law relating to import, transport, storage, production, refining and blending of petroleum. The Oilfields (Regulation and Development) Act, 1948The Act was introduced on 8th September, 1948 and deals with regulation of oilfields and development of mineral oil resources. Among other things, it regulates the drilling, redrilling, deepening, shutting down, plugging and abandoning of oil-wells in an oilfield.

21

Petroleum and Natural Gas Rules, 1959, 2002, 2009 Introduced in exercise of powers conferred by sections 5 and 6 of the Oilfields (Regulation and Development) Act, 1948 (53 of 1948) and in super-session of the Petroleum Concession Rules, 1949. It regulates the grant of exploration licenses and mining leases in respect of petroleum and natural gas, which belongs to Government & for conservation and development thereof. The rule regulates the exploration and mining of petroleum and natural gas.

The Oil Industry Act, 1974An Act to provide for the establishment of an Oil Industry Development Board for the development of oil industry and for that purpose to levy a duty of excise on crude oil and natural gas and for matters connected therewith. Also defines new rules for the Control by Central Government.

22

The Petroleum Pipelines Act, 1962An Act to provide for the acquisition of right of user in land for laying pipelines for the transport of petroleum and minerals and for matters connected herewith. Whenever it appears to the Central Government that is necessary in public interest that for the transport of petroleum or any mineral from one locality to another locality, pipelines may be laid by that government or by any state government or a corporation and that for the purpose of laying such pipelines it is necessary to acquire the right of user in any land under which such pipelines may be laid, it may, by notification in the Official Gazette, declare its intention to acquire the right of user therein.

Petroleum Rules, 1976These rules are in accordance with the Petroleum Act of 1934, modified further to meet the new trends of the time.

23

Safety in Offshore Operations Rules 2008Safe petroleum activities.- The licensee, the lessee, or as the case may be, the operator shall undertake the petroleum activities in a safe manner, both in relation to an individual and an overall consideration of all the factors of importance to planning and implementation of such activities as regards health, safety and environment.

Petroleum Amendment Rules, 2011

The original rules of 1959, 2002, 2009 are amended to make better rules so that it helps in better regulations of exploration, production, refining, pipelines etc.

Thank You!