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THE PETROLEUM AND NATURAL GAS REGULATORY BOARD ACT, 2006
MINISTRY OF LAW AND JUSTICE
(Legislative Department)
New Delhi, the 3rd April, 2006/Chaitra 13, 1928 (Saka)
The following Act of Parliament received the assent of the President on the 31st March, 2006, and is hereby published for general
THE PETROLEUM AND NATURAL GAS REGULATORY BOARD ACT, 2006
No. 19 OF 2006
[31st March, 2006.]
An Act to provide for the establishment of Petroleum and Natural Gas Regulatory Board to regulate the refining, processing, storage, transportation, distribution, marketing and sale of petroleum, petroleum products and natural gas excluding production of crude oil and natural gas so as to protect the interests of consumers and entities engaged in specified activities relating to petroleum, petroleum products and natural gas and to ensure uninterrupted and adequate supply of petroleum, petroleum products and natural gas in all parts of the country and to promote competitive markets and for matters connected therewith or incidental thereto,
BE it enacted by Parliament in the Fifty-seventh Year of the Republic of India as follows:—
CHAPTER I
PRELIMINARY
Short title, extent, commencement and application
1. (1) This Act may be called the Petroleum and Natural Gas Regulatory Board Act, 2006.
(2) It extends to the whole of India.
(3) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint:
Provided that different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision.
(4) It applies to refining, processing, storage, transportation, distribution, marketing and sale of petroleum, petroleum products and natural gas excluding production of crude oil and natural gas.
Definitions
2. In this Act, unless the context otherwise requires,—
(a) “affiliate code of conduct” means the code of conduct ‘governing entities engaged in storage, transmission, distribution, marketing and sale of natural gas under sub-section (1) of section 21;
(b) “Appellate Tribunal” means the Appellate Tribunal referred to in section 30;
(c) “appointed day” means the date on which the Board is established under sub-section (1) of section 3;
(d) “authorised entity” means an entity
(A) registered by the Board under section 15 -
(i) to market any notified petroleum, petroleum products or natural gas, or
(ii) to establish and operate liquefied natural gas terminals, or
(B) authorised by the Board under section 16 -
(i) to lay, build, operate or expand a ‘common carrier or contract carrier, or
(ii) to lay, build, operate or expand a city or local natural gas distribution network;
(e) “auto liquefied petroleum gas” means a mixture of certain light hydrocarbons derived from petroleum, which are gaseous at normal ambient temperature and atmospheric pressure but may be condensed to the liquid state at normal ambient temperature by the application of moderate pressure, and which conform to such specifications for use as fuel in vehicles, as the Central Government may, in consultation with the Bureau of Indian Standards, notify from time to time;
(f) “Board” means the Petroleum and Natural Gas Regulatory Board established under sub-section (1) of section 3;
(g) “Bureau of Indian Standards” means the Bureau of Indian Standards established under section 3 of the Bureau of Indian Standards Act, 1986;
(h) “Chairperson” means the Chairperson of the Board appointed under sub-section (1) of section 4;
(i) “city or local natural gas distribution network” means an inter-connected network of gas pipelines and the associated equipment used for transporting natural gas from a bulk supply high pressure transmission main to the medium pressure distribution grid and subsequently to the service pipes supplying natural gas to domestic, industrial or commercial premises and CNG stations situated in a specified geographical area.
Explanation.—For the purposes of this clause, the expressions “high pressure” and “medium pressure” shall mean such pressure as the Central Government may, by notification, specify to be high pressure or, as the case may be, medium pressure;
(f) “common carrier” means such pipelines for transportation of petroleum, petroleum products and natural gas by more than one entity as the Board may declare or authorise from time to time on a non-discriminatory open access basis under sub-section (3) of section 20, but does not include pipelines laid to supply
(i) petroleum products or natural gas to a specific consumer; or
(ii) crude oil;
Explanation.—For the purposes of this clause, a contract carrier shall be treated as a common carrier, if—
(i) such contract carrier has surplus capacity over and above the firm contracts entered into; or
(ii) the firm contract period has expired.
(k) “CNG station” means filling station where one or more dispensing units are provided for sale of compressed natural gas;
(l) “compressed natural gas or CNG” means natural gas used as fuel for vehicles, typically compressed to the pressure ranging from 200 to 250 bars in the gaseous state;
(m) “contract carrier” means such pipelines for transportation of petroleum, petroleum products and natural gas by more than one entity pursuant to firm contracts for at least one year as may be declared or authorised by the Board from time to time under sub-section (3) of section 20;
(n) “dealer” means a person, association of persons, firm, company or co-operative society, by whatsoever name called or referred to, and appointed by an oil company to purchase, receive, store and sell motor spirit, high speed diesel, superior kerosene oil, auto liquefied petroleum gas or natural gas;
(o) “distributor” means a person, association of persons, firm, company or co-operative society, by whatsoever name called or referred to, and appointed by an oil company to purchase, receive, store and sell b consumers liquefied petroleum gas in cylinders;
(p) “entity” means a person, association of persons, firm, company or co-operative society, by whatsoever name called or referred to, or than a dealer or distributor, and engaged or intending to be engaged in refining, processing, storage, transportation, distribution, marketing, import and export of petroleum, petroleum products and natural gas including laying of pipelines for transportation of petroleum, petroleum products and natural gas, or laying, building, operating or expanding city or local natural gas distribution network or establishing and operating a liquefied natural gas terminal;
(q) “exchange of products” shall mean giving and receiving of a petroleum product in accordance with an agreement entered into by the concerned entities;
(r) “high speed diesel” means any hydrocarbon oil (excluding mineral colza oil and turpentine substitute), which conforms to such specifications for use as fuel in compression ignition engines, as the Central Government may, in consultation with the Bureau of Indian Standards, notify from time to time;
(s) “kerosene or superior kerosene oil” means a middle distillate mixture of hydrocarbons which conforms to such specifications, as the Central Government may, in consultation with the Bureau of Indian Standards, notify from time to time;
(t) “liquefied natural gas terminal” means the facilities and infrastructure required to
(i) receive liquefied natural gas;
(ii) store liquefied natural gas;
(iii) enable regasification of liquefied natural gas; and
(iv) transport regasified liquefied natural gas till the outside boundaries of the facility;
(u) “liquefied petroleum gas” means a mixture of light hydrocarbons containing propane, isobutane, normal butane, butylenes, or such other substance which is gaseous at normal ambient temperature and atmospheric pressure but may be condensed to liquid state at normal ambient temperature by the application of pressure and conforms to such specifications, as the Central Government may, in consultation with the Bureau of Indian Standards, notify from time to time;
(v) “local distribution entity” means an entity authorised by the Board under section 20 to lay, build, operate or expand a city or local natural gas distribution network;
(w) “marketing service obligations” means obligations
(i) to set up marketing infrastructure and retail outlets in remote areas in respect of notified petroleum and petroleum products;
(ii) to maintain minimum stock of notified petroleum and petroleum products;
(iii) of a local distribution entity to supply natural gas to consumers; and
(iv) such other obligations as may be specified by regulations;
(x) “maximum retail price” means the maximum price fixed by an entity at which the petroleum, petroleum products and natural gas may be sold to the retail consumers and includes all taxes, cess and levies, local or otherwise and freight or commission payable to the dealers;
(y) “member” means a member of the Board appointed under sub-section (1) of section 4 and includes the Member (Legal) and the Chairperson;
(z) “motor spirit” means any hydrocarbon oil (excluding crude mineral oil) used as fuel in spark ignition engines which conforms to such specifications, as the Central Government may, in consultation with the Bureau of Indian Standards, notify from time to time;
(za) “natural gas” means gas obtained from bore-holes and consisting primarily of hydrocarbons and includes
(i) gas in liquid state, namely, liquefied natural gas and regasified liquefied natural gas,
(ii) compressed natural gas,
(iii) gas imported through transnational pipe lines, including CNG or liquefied natural gas,
(iv) gas recovered from gas hydrates as natural gas,
(v) methane obtained from coal seams, namely, coal bed methane, but does not include helium occurring in association with such hydrocarbons;
(zb) “notification” means a notification published in the Official Gazette and the expression “notified” with its cognate meanings and grammatical variations, shall be construed accordingly;
(zc) “notified petroleum, petroleum products and natural gas” means such petroleum, petroleum products and natural gas as the Central Government may notify from time to time, after being satisfied that it is necessary or expedient so to do for maintaining or increasing their supplies or for securing their equitable distribution or ensuring adequate availability;
(zd) ‘‘oil company” means a company registered under the Companies Act, 1956 and includes an association of persons, society or firm, by whatsoever name called or referred to, for carrying out an activity relating to petroleum, petroleum products and natural gas;
(ze) “petroleum” means any liquid hydrocarbon or mixture of hydrocarbons, and any inflammable mixture (liquid, viscous or solid) containing any liquid hydrocarbon, including crude oil and liquefied petroleum gas, and the expression ‘petroleum product’ shall mean any product manufactured from petroleum;
(zf) “pipeline access code” means the code to establish a framework for third party access to pipelines under sub-clause (i) of clause (e) of section 11;
(zg) “prescribed” means prescribed by rules made by the Central Government under this Act;
(zh) “regulations” means regulations made by the Board under this Act;
(zi) “restrictive trade practice” means a trade practice which has, or may have, the effect of preventing, distorting or restricting competition in any manner and in particular,
(i) which tends to obstruct the flow of capital or resources into the stream of production, or
(ii) which tends to bring about manipulation of prices, or conditions of delivery or to affect the flow of supplies in the market relating to petroleum, petroleum products or natural gas or services in such manner as to impose on the consumers unjustified costs or restrictions;
(zj) “retail outlet” means filling station where one or more dispensing pumps have been provided for sale of motor spirit, high speed diesel, auto-liquefied petroleum gas or natural gas and includes distributorship for liquefied petroleum gas or dealership for superior kerosene oil or CNG stations;
(zk) “retail service obligations” means obligations of dealers and distributors for maintaining supplies to consumers throughout the specified working hours and of specified quality, quantity and display of maximum retail price of notified petroleum, petroleum products and natural gas including CNG and such other obligations, as may be specified by regulations;
(zl) “rules” means rules made by the Central Government under this Act;
(zm) “Secretary” means the Secretary of the Board;
(zn) “transportation rate”, in relation to common carrier or contract carrier or a city or local natural gas distribution network, means such rate for moving each unit of petroleum, petroleum products or natural gas as may be fixed by regulations.
CHAPTER II
PETROLEUM AND NATURAL GAS REGULATORY BOARD
Establishment and incorporation of the Board
3. (1) With effect from such date as the Central Government may, by notification, appoint, there shall be established, for the purposes of this Act, a Board to be called the Petroleum and Natural Gas Regulatory Board.
(2) The Baud shall be a body corporate by the name aforesaid, having perpetual succession and a common seal, with power, subject to the provisions of this Act, to acquire, hold and dispose of property, both movable and immovable, and to contract, and shall, by the said name, sue or be sued.
(3) The Board shall consist of a Chairperson, a Member (Legal) and three other members to be appointed by the Central Government.
(4) The head office of the Board shall be at New Delhi and regional offices at such places as the Board may deem necessary having regard to public interest and magnitude of the work.
Qualifications for appointment of Chair-person and other members
4. (1) The Central Government shall appoint the Chairperson and other members of the Board from amongst persons of eminence in the fields of petroleum and natural gas industry, management, finance, law, administration or consumer affairs:
Provided that no person shall be appointed as Member (Legal) unless he—
(a) is qualified to be a Judge of a High Court; or
(b) has been a member of the Indian Legal Service and has held a post in Grade I of that Service for at least three years.
(2) The Central Government shall, for the purposes of selecting the Chairperson and after members of the Board and for preparing a panel of persons to be considered for appointment as the Technical Member (Petroleum and Natural Gas) of the Appellate Tribunal, constitute a Search Committee consisting of—
(i) Member, Planning Commission in charge of the energy sector - Chairperson;
(ii) Secretary to the Government of India, Ministry of Petroleum and Natural Gas - Member;
(iii) Secretary to the Government of India, Ministry of Finance, Department of Economic Affairs - Member;
(iv) Secretary to the Government of India in charge of Commerce, Ministry of Commerce and Industry - Member; and
(v) Secretary to the Government of India, Department of Legal Affairs, Ministry of Law and Justice - Member.
Term of office, conditions of service, etc., of Chairperson and other members
5. (1) Before appointing any person as the Chairperson or other member, the Central Government shall satisfy itself that such person does not have any financial or other interest which is likely to affect prejudicially his functions as Chairperson or such other member.
(2) The Chairperson and other members shall hold office for a term of five years from the date on which they enter upon their offices or until they attain the age of sixty-five years, whichever is earlier:
Provided that the Chairperson and other members shall not be eligible for re-appointment.
Explanation.—For the purposes of this section, appointment of a member as Chairperson shall not be deemed to be re-appointment.
(3) A person in the service of the Central Government, a State Government or an undertaking, corporation or company owned or controlled by the Central Government or a State Government or from any other non-Governmental or corporate body shall resign or retire from such service before joining as the Chairperson or other member, as the case may be.
(4) The salaries and allowances payable to and the other terms and conditions of service of the Chairperson and the other members shall be such as may be prescribed:
Provided that neither the salary and allowances nor the other terms and conditions of service of the Chairperson or any other member shall be varied to his disadvantage after appointment.
(5) The Chairperson or other member may resign his office by giving notice thereof in writing to the Central Government and on such resignation being accepted, the Chairperson or such other member shall be deemed to have vacated his office.
(6) The Chairperson or any other member, upon ceasing to hold office as such, shall
(a) be ineligible for further employment under the Central Government or any State Government; and
(b) not accept any commercial employment for a period of two years from the date he ceases to hold such office.
Explanation.—For the purposes of this section, “commercial employment” means employment in any capacity under, or agency of, a person engaged in trading, commercial, industrial or financial business in any field and includes also a director of a company or partner of a firm or setting up practice either independently or as partner of a firm or as an advisor or a consultant.
Powers of Chairperson
6. The Chairperson shall have the powers of general superintendence and directions in the conduct of the affairs of the Board and shall, in addition to presiding over the meetings of the Board, exercise and discharge such other powers and functions of the Board, as may be assigned to him by the Board.
Removal of Chairperson or any other member from office
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