1. Karthik Madhavan
SCMHRD, Pune.
Petroleum &
Natural Gas
Regulations

2. 2
The Petroleum And Natural Gas
Regulatory Board Act, 2006
 The establishment of Petroleum and Natural Gas
Regulatory Board.
 To regulate
Refining Processing
Storage Transportation
Distribution Marketing & Sale
of petroleum, petroleum products and natural gas
excluding production of crude oil and natural gas.

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 Toprotect 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
 Topromote competitive markets and for matters
connected therewith or incidental thereto.

4. 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;

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 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;

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 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;

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 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

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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

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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.

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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.

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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.

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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.

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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.

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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.

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 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.

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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.

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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.

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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.

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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).

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Other Acts & Rules
 The Petroleum Act, 1934
An 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, 1948
The 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.

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 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, 1974
An 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.

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 The Petroleum Pipelines Act, 1962
An 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, 1976
These rules are in accordance with the Petroleum Act of 1934,
modified further to meet the new trends of the time.

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 Safety in Offshore Operations Rules 2008
Safe 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.

24. Thank You!