INDIAN OIL CORPORATION LIMITED vs PETROLEUM AND NATURAL GAS REGULATORY BOARD

2024-08-14 Information

* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 14th AUGUST, 2024
IN THE MATTER OF:
+ W.P.(C) 15285/2023 & CM APPL. 61267/2023
IMC LIMITED ….. Petitioner
Through: Mr. Ramji Srinivasan, Sr. Advocate with Mr. Saurav Agarwal, Mr. Trinath Tadakamalla, Ms. Utsha Dasgupta, Ms. Nisha Bhatia, Mr. Samyak Bilala, Mr. Anshuman Choudhary and Ms. Namrata, Advocates.
versus

UNION OF INDIA AND ORS. ….. Respondents

Through: Mr. Apoorv Kurup, CGSC with Mr. Gurjas Singh Narula, Ms. Nidhi Mittal, Mr. Akhil Hasija, Ms. Aanchal and Ms. Gauri Goburdhan, Advocates and Mr. Rudra Paliwal, GP.
Ms. Madhavi Divan, Sr. Advocate with Mr. Rahul Sagar Sahay, Mr. Prince Singh, Ms. Sonali Malhotra, Ms. Sanskriti Bhardwaj, Ms. Harshita Tomar and Ms. Sakshi Singh, Advocates for R-2.
Mr. Abhinav Vasisht, Sr. Advocate with Mr. Prashant Bezboruah and Ms. Akshita Sachdeva Jaitly, Advocates for R-3.

+ W.P.(C) 2896/2024 & CM APPLs. 11960/2024, 11961/2024
INDIAN OIL CORPORATION LIMITED ….. Petitioner
Through: Mr. Abhinav Vasisht, Sr. Advocate with Mr. Prashant Bezboruah and Ms. Akshita Sachdeva Jaitly, Advocates.
versus

PETROLEUM AND NATURAL GAS REGULATORY BOARD
….. Respondent

Through: Ms. Madhavi Divan, Sr. Advocate with Mr. Rahul Sagar Sahay, Mr. Prince Singh, Ms. Sonali Malhotra, Ms. Sanskriti Bhardwaj, Ms. Harshita Tomar and Ms. Sakshi Singh, Advocates for R-1.
Mr. Ramji Srinivasan, Sr. Advocate with Mr. Saurav Agarwal, Mr. Trinath Tadakamalla, Ms. Utsha Dasgupta, Ms. Nisha Bhatia, Mr. Samyak Bilala, Mr. Anshuman Choudhary and Ms. Namrata, Advocates.
Mr. Apoorv Kurup, CGSC with Mr. Gurjas Singh Narula, Ms. Nidhi Mittal, Mr. Akhil Hasija, Ms. Aanchal and Ms. Gauri Goburdhan, Advocates and Mr. Rudra Paliwal, GP.

CORAM:
HON’BLE MR. JUSTICE SUBRAMONIUM PRASAD
JUDGMENT
1. The present writ petitions raise an important question of law of public importance as to whether after the enactment of the Petroleum and Natural Gas Regulatory Board Act, 2006 (hereinafter referred to as the ‘PNGRB Act’), can entities lay a captive pipeline for transport of its petroleum and petroleum products without the authorization of the Petroleum and Natural Gas Regulatory Board (hereinafter referred to as the ‘PNGRB’).
2. This judgment disposes of two writ petitions, one filed by IMC Limited (hereinafter referred to as the ‘Petitioner’) and the other filed by Indian Oil Corporation Limited (hereinafter referred to as the ‘IOCL’).
3. Since the issues raised in both the writ petitions are common, with the consent of the parties, the writ petitions are being disposed of vide a common judgment.
4. The facts of the case as stated by the Petitioner in its writ petition, i.e., W.P.(C) 15285/2023, are that the PNGRB issued an application-cum-bid document for grant of authorization for laying, building, operating or expanding a pipeline 14 kms. from outside the boundary of Ennore Port to Manali Industrial Area. The bid document was amended and the length of the pipeline which was originally fixed at 14 kms. from outside the boundary of Ennore Port was extended to a point within the Ennore Port and was extended from 14kms. to 21 kms. The Petitioner submitted its Expression of Interest to the PNGRB.
5. Material on record indicates that both the Petitioner and the IOCL sought for authorization from the Board to lay down the said pipeline. The Petitioner was successful and was given the Letter of Authorization on 18.12.2015 to lay down the said pipeline.
6. It is the case of the Petitioner that in October, 2023, i.e., after about 8 years after the Letter of Authorization was given to the Petitioner, the IOCL started laying down two multi product petroleum and petroleum products pipelines of 30″ diameters and 10.5 kms. length from KPL Jetty to Vellur Terminal which is operated by IOCL. The IOCL is also laying down three pipelines of 24″ diameter and 9kms. length from Vellur Terminal to Manali Industrial Area. All the pipelines are being laid without getting any authorization from the PNGRB.
7. Material on record indicates that PNGRB vide a communication dated 13.12.2023 has directed the IOCL to stop laying these pipelines with immediate effect since the IOCL has not taken authorization from the PNGRB for laying down the said pipeline.
8. IMC Limited has approached this Court by filing W.P.(C) 15285/2023 with the following prayers:
a) transfer to itself the Petition dated 07.11.2023 filed by the Petitioner under Section 24 and 25 of PNGRB Act, 2006 before the PNGRB Board/Respondent No. 2 and grant the following reliefs prayed therein:

(i) Direct IOCL to immediately stop the construction of the Unauthorized Pipelines in respect of transportation of petroleum and petroleum product for the route between Ennore Port and Manali Industrial Area, Tamil Nadu which was already covered by EPMPL authorized to the Petitioner by the Hon’ble Board.

(ii) Prohibit IOCL from undertaking construction of the Unauthorized Pipelines in respect of transportation of petroleum and petroleum product for the route between Ennore Port and Manali Industrial Area, Tamil Nadu which was already covered by EPMPL authorized to the Petitioner by the Hon’ble Board.

(iii) Impose a penalty and take any other action as the this Hon’ble Court deems fit against IOCL for violating Section 16 of the PNGRB Act, by constructing the pipeline without authorization of the PNGRB Board.

(iv) Direct IOCL to compensate the Petitioner under Section 21(3) of the PNGRB Act for damages caused to the Petitioner by continuous infringement of the Petitioner’s rights by IOCL’s construction of Unauthorized Pipelines leading to financial and business losses to the Petitioner.

OR, in the alternative

b) grant the following protective reliefs to the Petitioner till the PNGRB is duly constituted by the Respondent No. 1 and capable of constituting a bench and adjudicating the Petitioners Petition dated 07.11.2023 under Section 24 and 25 of the PNGRB Act:

iii) issue appropriate writ or directions to restrain the Respondent No. 2, PNGRB from granting any approval or authorization to Respondent No. 3 in respect of the Unauthorized Pipelines in respect of transportation of petroleum and petroleum product between for points the route between Port and Manali Industrial Area, Tamil Nadu which was already covered by EM Pipeline authorized to the Petitioner by the PNGRB.

iv) issue appropriate writ or directions to restrain (or direct Respondent No. 2 to restrain) IOCL from undertaking the construction of the Unauthorized Pipelines in respect of transportation of petroleum and petroleum product between for points the route between Ennore Port and Manali Industrial Area, Tamil Nadu which was already covered by EM Pipeline authorized to the Petitioner by the PNGRB.

c) issue appropriate writ or directions to Respondent No. 1 to immediately take steps for expeditious appointment of Member (Legal) on the PNGRB Board.

d) pass any other or further orders as this Hon’ble Court may deem fit and proper in the circumstances of the case in favour of the Petitioner.

9. IOCL has approached this Court by filing W.P.(C) 2896/2024 for setting aside the Communication dated 13.12.2023 issued by PNGRB directing the IOCL to stop laying down the pipelines on the ground that regulating the laying down of pipelines which are meant for captive use and for transportation of the products of the IOCL from the jetty to its terminal is outside the purview of the PNGRB Act, and therefore not within the jurisdiction of the Board.
10. The transportation of petroleum and petroleum products was governed by the Petroleum Act, 1934. The Parliament had also enacted Petroleum & Minerals Pipelines (Acquisition of Right of User in Land) Act, 1962. The object of the Act was to provide for the acquisition of right of user in land for laying petroleum pipelines for transport of petroleum and minerals and for matters connected therewith.
11. In the year 2002, the Ministry of Petroleum and Natural Gas of the Government of India brought out Guidelines for Laying Petroleum Products Pipeline (hereinafter referred to as the ‘2002 Guidelines’) on 20.11.2002. In the said 2002 Guidelines, petroleum products pipelines were categorized in three compartments; (i) pipelines originating from refineries, whether coastal or inland upto a distance of 300 kms. from the refinery; (ii) pipelines dedicated for supplying product to a particular consumer, originating either from a refinery or from company’s terminal; and (iii) pipelines originating from refineries exceeding 300 kms. in length and pipelines originating from ports, other than those specified in (i) and (ii) above.
12. The land for these pipelines is acquired under the provisions of Petroleum Pipelines (Acquisition of Right of User in Land) Act, 1962. This act remains in force even as of date. The 2002 Guidelines also provided for the procedure to be followed for acquiring right of user in land for laying down pipelines under the Petroleum Pipelines (Acquisition of Right of User in Land) Act, 1962 for pipelines originating from refineries exceeding 300 kms. length and pipelines originating from ports other than pipelines originating from refineries upto a distance of 300 kms. from the refinery and pipelines dedicated for supplying the product to particular consumer either from the refinery or the company’s terminal. The procedure indicates that the proposal for laying down a common usage product pipeline could originate from any single interested party or a joint venture. The Ministry of Petroleum and Natural Gas would publicize the proposal inviting the Expression of Interest. The procedure given in the 2002 Guidelines has been described in the following manner:-
” 3.1 A proposal for laying common usage product pipeline could originate from any single interested party or a joint-venture (herein after referred to as proposer).
3.2 The Ministry of Petroleum and Natural Gas shall publicize, in such manner as the Ministry may decide, the proposal inviting expression of interest, within a period of three months from anyone interested in the proposal. In case any company is interested in taking any capacity in the pipeline, it could express its interest and enter into “take or pay” or any other mutually agreeable contract with the proposer. The pipeline size and design would be finalized by the proposer after taking into consideration all such requests.

3.3 In case, no expression of interest is received from any industry player within a period of three months of publicizing the proposal, the proposer would be at liberty to go ahead with the project.

3.4 The designed pipeline capacity would be at least 25°/o more than the capacity requirement of the proposer and of those who take capacity Under clause 3.2, as may be decided by the Ministry of Petroleum and Natural Gas.

3.5 The ownership of the pipeline would be that of the proposer or as may be decided by the proposer, irrespective of whether the other industry player(s) take pipeline capacity or not.

3.6 The excess capacity; as mentioned in clause 3.4, would be available for use by anyone, other than the owner and those taking capacity under clause 3.2, at the approved tariff, as per the provisions under clause 4, on “common carrier” basis i.e. capacity would be made available to anyone interested and offering to pay the tariff. In case such demand exceeds this excess capacity, the allocation of the excess capacity would be pro-rated amongst the interested users other than the owner and those taking capacity under clause 3.2. ”

13. The 2002 Guidelines also provided that they will remain in force till Petroleum Regulatory Board is constituted and after the Board is constituted, the Right of User and land for laying petroleum product pipelines will be granted by the Ministry of Petroleum and Natural Gas, subject to the fulfilment of requirements under the petroleum regulatory law. Clause 6.1 and Clause 6.2 of the 2002 Guidelines reads as under:-
” 6.1 These guidelines will remain in force till the Petroleum Regulatory Board is constituted.

6.2 After Petroleum Regulatory Board is constituted, the RoU in land for laying petroleum product pipelines will be granted by the Ministry of Petroleum & Natural Gas, subject to fulfillment of requirements under the petroleum regulatory law. ”

14. Pursuant to the 2002 Guidelines, the PNGRB Act was brought into force. The Preamble and the Statement of Object and Reason of the PNGRB Act reads as under:-
“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”

“Statement of Objects and Reasons.Consequent upon the Government decision for phased dismantling of Administered Pricing Mechanism and deregulation of petroleum sector from April 2002, marketing and pricing of all petroleum products except Public Distribution System Kerosene and LPG (Domestic) have been decontrolled with effect from the 1st April, 2002. To prevent exploitation of consumers in the deregulated scenario, it is proposed to provide for a regulatory mechanism which would facilitate uninterrupted and adequate supply of notified petroleum, petroleum products and natural gas in all parts of the country, including remote areas at fair price and to promote competitive markets and access to common or contract carrier on non-discriminatory basis by all entities. With respect to such petroleum, petroleum products and natural gas as may be notified by the Government from time to time, the Bill also entails provision of retail service obligations for retail outlets and marketing service obligations for entities. It is also proposed to establish the Petroleum and Natural Gas Regulatory Board under the Bill so as to ensure that each marketing entity displays for the information of customers the maximum retail prices for the notified petroleum and petroleum products and natural gas, and take steps, in accordance with the regulations, to prevent restrictive trade practices by the entities. Provisions have been made in the Bill so as to ensure redressal of grievances and protection of consumer interest as also resolution of disputes among entities or between an entity and any other person.”

15. It is pertinent to mention at this juncture that though the Statement of Object and Reason states that the object of the PNGRB is to oversee and regulate the refining, processing, storage, transportation, distribution, marketing and sale of petroleum and petroleum products and natural gas, the PNGRB Act deals only with two types of pipelines which has been defined as common carrier and contract carrier. The relevant provisions of the PNGRB Act which are necessary for the adjudication of the issue raised in the writ petitions read as under:-
“2. Definitions.
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(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;

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(j) 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 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.
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(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;

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(p) entity means a person, association of persons, firm, company or co-operative society, by whatsoever name called or referred to, other 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;

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11. Functions of the Board.The Board shall

(a) protect the interest of consumers by fostering fair trade and competition amongst the entities;

(b) register entities to

(i) market notified petroleum and petroleum products and, subject to the contractual obligations of the Central Government, natural gas;

(ii) establish and operate liquefied natural gas terminals;

(iii) establish storage facilities for petroleum, petroleum products or natural gas exceeding such capacity as may be specified by regulations;

(i) lay, build, operate or expand a common carrier or contract carrier;

(ii) lay, build, operate or expand city or local natural gas distribution network;

(d) declare pipelines as common carrier or contract carrier;

(e) regulate, by regulations,

(i) 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;

(ii) transportation rates for common carrier or contract carrier;

(iii) access to city or local natural gas distribution network so as to ensure fair trade and competition amongst entities as per pipeline access code;

(f) in respect of notified petroleum, petroleum products and natural gas

(i) ensure adequate availability;

(ii) ensure display of information about the maximum retail prices fixed by the entity for consumers at retail outlets;

(iii) monitor prices and take corrective measures to prevent restrictive trade practice by the entities;

(iv) secure equitable distribution for petroleum and petroleum products;

(v) provide, by regulations, and enforce, retail service obligations for retail outlets and marketing service obligations for entities;

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

(g) levy fees and other charges as determined by regulations;

(h) maintain a data bank of information on activities relating to petroleum, petroleum products and natural gas;

(i) 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;

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

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16. Authorisation.No entry shall

(a) lay, build, operate or expand any pipeline as a common carrier or contract carrier,

(b) lay, build, operate or expand any city or local natural gas distribution network, without obtaining authorisation under this Act:

Provided that an entity,

(i) laying, building, operating or expanding any pipeline as common carrier or contract carrier; or

(ii) laying, building, operating or expanding any city or local natural gas distribution network,

immediately before the appointed day shall be deemed to have such authorisation subject to the provisions of this Chapter, but any change in the purpose or usage shall require separate authorisation granted by the Board.

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17. Application for authorisation.(1) An entity which is laying, building, operating or expanding, or which proposes to lay, build, operate or expand, a pipeline as a common carrier or contract carrier shall apply in writing to the Board for obtaining an authorisation under this Act:

Provided that an entry laying, building, operating or expanding any pipeline as common carrier or contract carrier authorised by the Central Government at any time before the appointed day shall furnish the particulars of such activities to the Board within six months from the appointed day.

(2) An entry which is laying, building, operating or expanding, or which proposes to lay, build, operate or expand, a city or local natural gas distribution network shall apply in writing for obtaining an authorisation under this Act:

Provided that an entity laying, building, operating or expanding any city or local natural gas distribution network authorised by the Central Government at any time before the appointed day shall furnish the particulars of such activities to the Board within six months from the appointed day.

(3) Every application under sub-section (1) or sub-section (2) shall be made in such form and in such manner and shall be accompanied with such fee as the Board may, by regulations, specify.

(4) Subject to the provisions of this Act and consistent with the norms and policy guidelines laid down by the Central Government, the Board may either reject or accept an application made to it, subject to such amendments or conditions, if any, as it may think fit.

(5) In the case of refusal or conditional acceptance of an application, the Board shall record in writing the grounds for such rejection or conditional acceptance, as the case may be.

18. Publicity of application.When an application for registration for marketing notified petroleum, petroleum products and natural gas, or for establishing and operating a liquefied natural gas terminal, or for establishing storage facilities for petroleum, petroleum products or natural gas exceeding such capacity as may be specified by regulations, is accepted whether absolutely or subject to conditions or limitations, the Board shall, as soon as may be, cause such acceptance to be known to the public in such form and manner as may be provided by regulations.

19. Grant of authorisation.(1) When, either on the basis of an application for authorisation for laying, building, operating or expanding a common carrier or contract carrier or for laying, building, operating or expanding a city or local natural gas distribution network is received or on suo motu basis, the Board forms an opinion that it is necessary or expedient to lay, build, operate or expand a common carrier or contract carrier between two specified points, or to lay, build, operate or expand a city or local natural gas distribution network in a specified geographic area, the Board may give wide publicity of its intention to do so and may invite applications from interested parties to lay, build operate or expand such pipelines or city or local natural gas distribution network.

(2) The Board may select an entity in an objective and transparent manner as specified by regulations for such activities.

20. Declaring, laying, building, etc., of common carrier or contract carrier and city or local natural gas distribution network.(1) If the Board is of the opinion that it is necessary or expedient, to declare an existing pipeline for transportation of petroleum, petroleum products and natural gas or an existing city or local natural gas distribution network, as a common carrier or contract carrier or to regulate or allow access to such pipeline or network, it may give wide publicity of its intention to do so and invite objections and suggestions within a specified time from all persons and entities likely to be affected by such decision.

(2) For the purposes of sub-section (1), the Board shall provide the entity owning, the pipeline or network an opportunity of being heard and fix the terms and conditions subject to which the pipeline or network may be declared as a common carrier or contract carrier and pass such orders as it deems fit having regard to the public interest, competitive transportation rates and right of first use.

(3) The Board may, after following the procedure as specified by regulations under Section 19 and sub-sections (1) and (2), by notification,

(a) declare a pipeline or city or local natural gas distribution network as a common carrier or contract carrier; or

(b) authorise an entity to lay, build, operate or expand a pipeline as a common carrier or contract carrier; or

(d) authorise an entity to lay, build, operate or expand a city or local natural gas distribution network.

(4) The Board may decide on the period of exclusively to lay, build, operate or expand a city or local natural gas distribution network for such number of years as it may by order, determine in accordance with the principles laid down by the regulations made by it, in a transparent manner while fully protecting the consumer interests.

(5) For the purposes of this section, the Board shall be guided by the objectives of promoting competition among entities, avoiding infructuous investment, maintaining or increasing supplies or for securing equitable distribution or ensuring adequate availability of petroleum, petroleum products and natural gas throughout the country and follow such principles as the Board may, by regulations, determine in carrying out its functions under this section.

21. Right of first use, etc.(1) The entity laying, building, operating or expanding a pipeline for transportation of petroleum and petroleum products or laying, building, operating or expanding a city or local natural gas distribution network shall have right of first use for its own requirement and the remaining capacity shall be used amongst entities as the Board may, after issuing a declaration under Section 20, determine having regard to the needs of fair competition in marketing and availability of petroleum and petroleum products throughout the country:

Provided that in case of an entity engaged in both marketing of natural gas and laying, building, operating or expanding a pipeline for transportation of natural gas on common carrier or contract carrier basis, the Board shall require such entities to comply with the affiliate code of conduct as may be specified by regulations and may require such entity to separate the activities of marketing of natural gas and the transportation including ownership of the pipeline within such period as may be allowed by the Board and only within the said period, such entity shall have right of first use.

(2) An entity other than an entity authorised to operate shall pay transportation rate for use of common carrier or contract carrier to the entity operating it as an authorisation entity.

(3) An entity authorised to lay, build, operate or expand a pipeline as common carrier or contract carrier or to lay, build, operate or expand a city or local natural gas distribution network shall be entitled to institute proceedings before the Board to prevent, or to recover damages for, the infringement of any right relating to authorisation.

Explanation.For the purposes of this sub-section, infringement of any right means doing of any act by any person which interferes with common carrier or contract carrier or causes prejudice to the authorised entity.

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61. Power of Board to make regulations.
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(2) (e) regulating open access to and transportation rate for the common carrier or contract carrier or city or local natural gas distribution network and other matters referred to in clause (e) of Section 11;

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(2)(p) the manner of selection of an entity under sub-section (2) of Section 19;

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(2)(r) the guiding principles to be followed by the Board and the objectives for declaring, or authorising to lay, build, operate or expand a common carrier or contract carrier for declaring, or authorising to lay, build, operate or expand a city or local natural gas distribution network, under sub-section (5) of Section 20;”

16. Under the regulation making power, the PNGRB has brought out the Petroleum and Natural Gas Regulatory Board (Authorizing Entities to Lay, Build, Operate or Expand Petroleum or Petroleum Products Pipelines) Regulations, 2010 (hereinafter referred to as the ‘2010 Regulations’). The relevant portion of the said Regulations which are necessary, reads as under:-
“2. Definitions.
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(d) development of petroleum and petroleum product pipeline means laying building operating or expanding a petroleum products pipeline shall be a period of twenty five years commencing from

(i) the date of grant of authorization to the entity by the Board in case an entity proposes to lay, build or expand a petroleum and petroleum products pipeline on or after the appointed day

(ii) the start-up date of the commencement of physical activities of laying, building or expanding the petroleum or expanding a petroleum and petroleum products pipeline before the appointed ay and the entity has either an authorization from the Central Government before the appointed day or an authorization from the Board under these regulations:

Provided that at the end of the aforesaid period of twenty five years, extensions of the period of economic life may be considered by the Board for a block of ten year at a time depending on the satisfactory compliance of the service obligations under these regulations and on such terms and conditions, as it may deem fit at that point in time.

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(i) petroleum and petroleum products pipeline means any pipeline including a branch or spur lines for transport of petroleum and petroleum products and includes all connected infrastructure such as pumps, metering units, storage facilities at originating, delivery tap off points or terminal stations and the like connected to the common carries or contract carriers including line balancing tanks and tankage required for unabsorbed interface, essential for operating a pipeline system but excluding pipelines, which are dedicated for supply of petroleum products to a specific consumer which are not for resale:

Provided that the transporter may own, hire outsource or use on hospitability basis such connected facilities on non discriminatory basis

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3. Applicability.These regulations shall apply to an entity

(a) which is laying, building, operating or expanding or which proposes to lay, build, operate or expand a petroleum and petroleum products pipeline for transporting one or more petroleum products including LPG and LNG, or

(b) which proposes or is directed by the Board to convert a dedicated or contract carrier pipeline for supply of petroleum products to a specific consumer into a common or contract carrier petroleum and petroleum products pipeline as the case may be.

4. Initiation of proposal through expression of interest route or suo-motu by Board.(1) An entity desirous of laying, building, operating or expanding a petroleum and petroleum products pipeline shall submit an expression of interest to the Board in the form of an application at Schedule A along with an application fee as specified under the Petroleum and Natural Gas Regulatory Board (Levy of fee and Other Charges) Regulations, 2007 as amended from time by the Board.

(2) The Board may suo-motu initiate a proposal inviting entities to participate in the process of selection for an entity for laying, building, operating or expanding petroleum and petroleum product pipeline along any route.

5. Criteria for selection of entity for expression of interest route.(1) In case the expression of interest fulfills the minimum eligibility criteria and the requirements list out at sub-regulation 6, the Board shall 10[webhost the same at PNGRB’s website giving wide publicity regarding] receipt of an expression of interest and commencement of public consultation period of thirty days.

(2) During the period of public consultation process, any person, authority or entity may submit in writing to the Board its views, if any on the expression of interest;

(3) The Board may web-host all comments received to facilitate possible contracts for capacity booking by different entities with the entities that may be interested in the development of petroleum and petroleum products pipelines so as to facilitate coming up of an optimum sized petroleum and petroleum products pipeline through the bidding process as stated in Regulation 7;

(4) The Board shall, based on the views received within a period of thirty day after the last day of the public consultation period decide

(a) not to allow the proposed petroleum and petroleum products pipelines if, it is convinced that, instead of laying, building or expanding the proposed petroleum and petroleum products pipeline, the projected potential demand could be better met in cost-effective manner by expansion of an existing pipeline or any other ground; or

(b) to go ahead with the proposal with or without modification

Provided that the Board in deciding so shall be guided by one or more of the following objective, namely:

(i) promoting competition among entities;

(ii) avoiding infructuous investment

(iii) maintaining or increasing supplies or for securing equitable distribution or ensuring adequate availability of petroleum products throughout the country;

(iv) protection of consumer interest;

(v) facilitating rapid development of petroleum and petroleum products pipeline infrastructure.

(5) The Board may, within the period specified in sub-regulation (4), 11[webhost], the proposal for the development of petroleum and petroleum products pipeline 12[on PNGRB’s website] and incite bids for the same.

(6) The Board shall scrutinize the bids received response to the advertisement in respect of only those entities which fulfill the following minimum eligibility criteria namely:

(a) entity has paid the application fee along with the application-cum-bid as specified for trunk lines as specified under Regulation 3 of the Petroleum and Natural Gas Regulatory Board (Levy of Fee and Other Charges) Regulations, 2007 as amended from time to time by the Board

(b) entity is technically capable of laying and building petroleum and petroleum products pipeline as per the following qualifying criteria, namely:

(i) entity has on its own, either departmentally or through contractors hired by it, in the past, laid and built either a hydrocarbon pipeline of a length not less than three hundred kilometers on a cumulative basis or a city or local natural gas distribution network;

(ii) entity has a joint venture with another entity (with at least eleven per cent, equity holding by that entity) which in the past has either laid and built a hydrocarbon pipeline of a length not less than three hundred kilometers on a cumulative basis or a city or local natural has distribution network;

(iii) entity intends to lay and build proposed petroleum, petroleum products pipeline on lump sum turnkey or project management consultancy basis through one or more technically competent firms, which in the past have laid and built a hydrocarbon pipeline of a length not less than three hundred kilometers or a city or local natural has distribution network and the entity shall also enclose a list of such firms along with aforesaid proof of their technical competence:

Provided that the entity shall have the freedom to choose such firms at the time of execution of the project and the Board reserves the right to cross verify the credential of the firms included in the list and seek clarifications; or

(iv) entity has an adequate number of technically qualified personnel with experience in construction and pre-commissioning of hydrocarbon pipeline to independently undertake and execute the petroleum and petroleum products pipeline project on standalone basis;

Explanation.The entity shall have at least three technically qualified personnel on its permanent rolls having experience of not less than one year in the following areas namely:

(a) right of way acquisition or clearance securing;

(b) design and execution of hydrocarbon pipeline project

(d) safety of hydrocarbon pipeline and installations

(c) entity is technically capable of operating and maintaining petroleum and petroleum products pipeline as per the following qualifying criteria, namely:

(i) entity on its own has an experience of at least one year in operations and maintenance of a petroleum and petroleum products pipeline of a length not less than three hundred kilometers on a cumulative basis;

(ii) entity has joint venture with another entity (with at least eleven per cent holding of that entity) which has an experience of at least one year in operations and maintenance of a petroleum and petroleum products pipeline.

(iii) entity intends to operate and maintain the proposed petroleum, petroleum products pipelines through an appropriate firms’ technical assistance agreement for a period of at least one year with another party having experience of at least one year in operations and maintenance of a petroleum and petroleum products pipeline; or

(iv) entity has an adequate number of technically qualified personnel with experience in commissioning operation and maintenance (O&M) of petroleum, petroleum products pipeline and also has a plan to independently undertake the O&M activities of petroleum, petroleum products pipeline on a standalone basis

Explanation.1. In relation to sub-clause (iii),

(a) the entity shall submit in its application-cum-bid and exhaustive list of proposed firms with whom it desires to have a technical assistance agreement along with the proof of relevant experience of such firms and the entity may choose a firm or more from amongst the firms in this list for operation and maintenance of the proposed petroleum and petroleum products pipeline and the Board reserves the right to cross verify the credential of the firm of firms included in this list and seek any clarifications2. In relation to sub-clause (iv), the entity shall have at least three technically qualified personnel on its permanent rolls having experience of not less than one year in the following areas, namely:

(a) commissioning of a hydrocarbon pipeline

(b) operation and maintenance of petroleum and petroleum products pipelines and petroleum products installations

(d) safety of petroleum products infrastructure

(d) the entity has adequate financial strength to execute the proposed petroleum, petroleum products pipeline project and operate and maintain the same and shall meet the following financial criterion to qualify for bidding for a single petroleum, petroleum products pipeline, namely:

Range of estimate pipeline length including branch lines (in kilometers) (#)
Minimum combined net worth (*) of the entity along with its promoters available for investments in a single petroleum and petroleum products pipeline duly supported by letter of comfort from promoters (in million of rupees per kilometer of estimated pipeline length)
1,001 and above
7.00
251-1000
6.00
Up to 250
5.00

(*) combined net worth (equity share capital plus free reserves, but excluding revaluation reserves) to be adequately represented by cash funds, which shall be available as bridge finance and as promoters equity contribution in the project as certified by a Chartered Accountant based on the latest financial position of the entity and its promoters.

(#) a fraction of the length in two decimals place less than 0.50 kilometer shall be ignore and equal to 0.50 kilometer or more shall be rounded off to next 1 kilometer

(e) the entity, on being declared as a successful bidder and not being a company registered under the Companies Act, 1956, shall convert itself into a company registered under the Companies Act, 1956

(f) the entity shall have a plan for utilization of the capacity in the proposed petroleum and petroleum products pipeline

(g) the entity shall furnish a bid bond in the form of Bank Guarantee along with the submission of the application-cum-bid under sub-regulation (7) of an amount determined as per the length of the proposed petroleum and petroleum products pipeline as per the applicable category indicated below:

Pipeline Length including branch lines (in kilometers)(#)
Amount of bid bond (in million of rupees)
equal to 1,001 or more
150
between 251 and 1000
80
less than or equal to 250
20

(#) a fraction of the length in tow decimals place less than 0.50 kilometer shall be ignore and equal to 0.50 kilometer or more shall be rounded off to next 1 kilometer.

(h) entity submitting the bid should not have charges framed under Chapter IX of the Act or have been punished or imposed any penalty under Section 28;

(i) the entity agrees to build extra capacity in the petroleum and petroleum products pipeline as per the following basis, namely:

(i) the capacity of petroleum and petroleum products pipeline shall be an aggregate of the following namely:

(A) capacity requirement of the entity

(B) firmed-up contracted capacity with other entities; and

Explanation.The capacity shall be approved by the Board as per the basis specified in the relevant regulations for determining the capacity of petroleum and petroleum products pipeline.

(ii) the capacity mentioned at item (C) of sub-clause (i) shall be available for use as common carrier by an third party on open access and non-discriminatory basis;

(j) in case the entity submitting the bid does not fulfill the requirements of any criteria under clauses (a) to (j), the bid submitted by it shall be summarily rejected and a communication in this regard shall be sent to it and the financial bid shall not be opened for that entity;

(k) the bid bond shall be(i) encashed if an entity submitting the bid walks out;

(ii) released in respect of the unsuccessful entity submitting the bid;

(iii) retained till the specified performance bond is furnished at the time of authorization by the successful bidder.

(7) The application-cum-bid shall be submitted in two parts in the form as specified in Schedule B in separate property earmarked and sealed envelopes, namely:

(a) Part I (Technical bid) covering general particulars of the applicant and technical details of the project (including minimum eligibility criteria) under sub-regulation (6);

(b) Part II (Financial bid) covering the details under Regulation 10.

(8) A time period of one hundred and twenty days shall be allowed for submission of the application-cum-bid for grant of authorization for laying, building, operating or expanding the petroleum and petroleum products pipeline and any application-cum-bid received after the notified date and time shall not be considered. However, the Board may extend the date for submission of bid as deemed fit.

6. Invitation by Board for laying, building, operating or expansion of petroleum and petroleum products pipeline.The Board may sub-moto by living interested parties either through submission of expression of interest (EOI) or through participation in the process of selection, through an open advertisement from a view regarding the development of a petroleum and petroleum products pipeline in a specific area, region or route, and in such a case, the procedure as specified in Regulation 5 shall apply.

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17. Entities authorized by the Central Government for laying, building, operating or expanding petroleum and petroleum products pipeline before the appointed day.(1) The entity shall submit relevant information along with supporting documents in the form as per Schedule H.

(2) The entity shall abide by the technical standards, specifications including safety standards as specified under the relevant regulations.

(3) The Board shall monitor the actual progress made by the entity in the activities of laying, building or expanding the petroleum and petroleum products pipeline on a quarterly basis with reference to the period of commissioning, the targets specified in the in the DFR of the project, and the terms and conditions of the authorization with a view to avoiding any time or cost over-runs which may adversely affect the petroleum and petroleum products pipeline tariff:

(a) not consider the additional costs attributable to the time over-run while fixing the petroleum and petroleum products pipeline tariff as specified under clause (5); or

(b) encash the performance bond or bank guarantee, if any and advise the Central Government for cancellation of the authorization.

(4) The Board shall approve the petroleum and petroleum products pipeline tariff to be charged by the entity based on the methodology as specified under the relevant regulations on determination of petroleum and petroleum products pipeline tariff.

(5) The activities of the entity may be subject to such other regulations as may be applicable as per the provisions of the Act.

18. Entity not authorized by the Central Government for laying, building, operating or expanding petroleum and petroleum products pipeline before the appointed day.(1) An entity laying, building, operating or expanding petroleum and petroleum products pipeline at any time before the appointed day not duly authorized to do so by the Central Government shall apply immediately for obtaining on authorization in the from as per Schedule I.

(2) The Board may consider the following criteria while considering the application for grant of authorization, namely:

(a) the entity meets the minimum eligibility criteria as specified in clauses (a) to (e) and (i) of sub-regulation (6) of Regulation 5 before the appointed date and is possessing all necessary statutory clearances, permissions, no objection certificates from the Central and State Governments and other statutory authorities;

(b) an entity which is not registered under the Companies Act, 1956 at the time of submitting the application for grant of authorization shall undertake to become a company registered under the Company Act, 1956:

Provided that the Board may exempt an entity to register under the Companies Act, 1956 on such conditions as it may deem appropriate;

(c) a satisfactory assessment of the actual physical progress made and the financial commitment thereof till immediately before the appointed day in comparison with the entity’s DFR appraised by the financial institution funding the project. In case the project has not been funded by any financial institution, the Board may appraise the DFR. The DFR of the entity should clearly indicate the specified length, route and capacity of the proposed petroleum and petroleum products pipeline;

(d) in respect of the actual physical progress made and the financial commitment thereof referred to in clause (c), a physical progress of at least twenty five percent and a financial commitment of at least twenty five percent of the capital expenditure identified for the petroleum and petroleum products pipeline project as per the DFR immediately before the appointed day may be considered as adequate;

(e) the Board reserves the right to get the actual physical progress and the financial commitment certified and depending upon the progress achieved, the Board may consider authorizing the entity for laying, building, operating or expanding the petroleum and petroleum products pipeline.

(i) as per the route and length as specified in its DFR;

(ii) as per the route or length actually covered under implementation till the appointed day; or

(iii) as per the route or length specified by the Board;

(f) in relation to laying, building, operating or expanding the petroleum and petroleum products pipeline, it is for the entity to satisfy the Board on the adequacy of its ability to meet the applicable technical standards, specifications and safety standards as specified in the relevant regulations for technical standards and specifications including safety standards;

(g) assessment of the financial position of the entity in timely and adequately meeting the financial commitments in developing the petroleum and products pipeline project as appraised by a financial institution and an examination of the audited books of accounts of the entity.

(h) the booking of the capacity in the petroleum and petroleum products pipeline should be equal to at least fifty percent of the sum of the own capacity requirements of the entity and firmed-up contracted capacity and the agreements in this regard should have been entered in a transparent manner and based on the principle of at an arm’s length;

(i) the entity shall submit copies of the agreements for transportation or supplying of petroleum products by the petroleum and petroleum products pipeline for he firmed-up contracted capacity specified under clause (h) to the Board; and

(j) any other criteria considered as relevant by the Board based on the examination of the application.

(3) The evaluation of the application in terms of the clauses (a) to (j) of sub-regulation (2) shall be done in totality considering the composite nature and the inter-linkages of the criteria.

(4) The Board, after examining the application in terms of the criteria under sub-regulation (3) and also taking into account the requirements in other regulations may form a prima-facie view as to whether the case should be considered for authorization.

(5) In case of prima-facie consideration, the Board shall issue a public notice in one notional and one vernacular daily newspaper (including webhosting) giving brief details of the project and seek comments and objections, if any, within thirty days from any person on the proposal.

(6) The Board, after examining the comments and objections, if any, under sub-regulation (5), may either consider or reject the case for grant of authorization for the petroleum and petroleum products pipeline.

(7) In case it is decided to grant authorization, the same shall be in the form at Schedule D;

(8) In case of rejection of the application, the Board shall pass a speaking order after giving a reasonable opportunity to the concerned partly to explain its case and proceed to select on appropriate entity for the project in terms of Regulation 6.

(9) in case the entity is selected for grant of authorization for laying, building, operating or expanding petroleum and petroleum products pipeline,

(a) the petroleum and petroleum products pipeline tariff shall be determined under the relevant regulations on determination of petroleum and petroleum products pipeline tariff;

(b) the entity shall abide by the technical standards, specifications including safety standards as specified under relevant regulations for technical standards and specifications including safety standards;

(c) the Board shall monitor the actual progress made by the entity in the activities of laying building or expanding the petroleum and petroleum products pipeline on a quarterly basis, with reference to the period of commissioning, the targets specified in the DFR of the project and the terms and conditions of the authorization with a avoiding any time or cost over-runs which may adversely affect the petroleum and petroleum products pipeline tariff:

Provided that in case of any delay in the commissioning of the petroleum and petroleum products pipeline or meeting any target beyond that specified in the authorization, the Board reserves the right to not consider the additional costs attributable to the time over-run while fixing the petroleum and petroleum products pipeline tariff as specified under sub-regulation (a);

(d) the entity shall abide by the provisions under the relevant Regulations an access code and declaring petroleum and petroleum products pipelines as common carrier or contract carrier;

(e) the provisions under Regulations 8, 9, 13, 14, 15 and 16 shall apply to the entity.

19. Provisions relating to dedicated pipelines for transport of petroleum products.(1) In respect of dedicated pipelines existing before the appointed day, the following provisions shall apply, namely.

(a) entity having dedicated pipeline to transport petroleum products to a specific customer before the appointed day shall submit details of the pipeline length, route, capacity and customers served along with the DFR of the project to the Board within sixty days of notification of these regulations;

(b) Board may web-host details of dedicated pipeline seeking comments of general public with a view to ascertain whether such pipeline needs’ to be converted into petroleum and petroleum products pipeline in public interest;

(c) The Board may, based on the examination of the comments received, direct the entity to convert such pipeline into petroleum and petroleum products pipeline in overall public interest:

Provided that the entity shall be given an opportunity to present its case;

(d) The entity may also submit its proposal to convert its dedicated pipeline into petroleum and petroleum products pipeline to the Board along with the complete details and justifications and the Board may web-host details of dedicated pipeline seeking comments of general public with a view to ascertain whether such pipeline needs to be converted into petroleum and petroleum products pipeline in public interest and the Board may, based on the examination of the comments received and in overall public interest, issue grant of authorization to the entity for conversion into a petroleum and petroleum products pipeline.

(2) In respect of dedicated pipelines proposed to be laid, built, operated or expanded after the appointed day, following provisions shall apply, namely.

(a) the entity proposing to lay, build, operate or expand a dedicated pipeline to transport petroleum products to a specific customer and is not for resale after the appointed day shall submit details on pipeline length, route. Capacity and details of the customers served along with the DFR of the project to the Board at least thirty days before the proposed commencement of laying and building of the dedicated pipeline;

(b) Board may web-host details of the proposed dedicated pipeline seeking comments of general public with a view to ascertain whether, instead of a dedicated pipeline, the public interest would be better served if a petroleum and petroleum products pipeline is laid, built, operated or expanded;

(c) in case, based on the examination of the comments received, the Board is of the view that instead of a dedicated pipeline, petroleum and petroleum products pipeline would better serve the public purpose the Board shall advise the entity appropriately within sixty days of the receipt of the information from the entity;

(d) in case, despite receiving the advice from the Board under clause (c), the entity still wishes to lay, build, operate or expand a dedicated pipeline, it may do so:

Provided that simultaneous to the entity building a dedicated pipeline, the Board may, on suo-motu basis, decide to issue to expression of interest for laying, building, operating or expanding petroleum and petroleum products pipeline:

Provided further that the entity shall not be allowed to apply to the Board for conversion of its dedicated pipeline into petroleum and petroleum products pipeline for a period of five years from the date of the commissioning of its dedicated pipeline;

(e) the Board may, in respect of a dedicated pipeline laid, built, operated or expanded after the appointed day, direct the entity to convert dedicated pipeline into petroleum, petroleum products pipeline as per the following procedure, namely:

(i) the Board may web-host details of dedicated pipeline seeking comments of general public with a view to ascertain whether such pipeline needs to be converted into petroleum and petroleum products pipeline in public interest;

(ii) the Board may, based on the examination of the comments received, direct the entity to convert such pipeline into petroleum and petroleum products pipeline in overall public interest:

Provided that the entity shall be given an opportunity to present its case.

(3) In case a dedicated pipeline is converted into petroleum and petroleum products pipeline under sub-regulations (1) to (2), the provisions under the sub-regulation (9) of Regulation 18 shall apply to such pipeline.”

17. It is pertinent to mention that after the PNGRB invites interested parties for submitting Expression of Interest to the participation of selection through an open advertising, the Board tabulates the criteria and compare all financial bids meeting the eligibility requirement criteria under Regulation 7 of the 2010 Regulations. Necessary bonds to be submitted by the party is given in Regulation 8 and Regulation 9 which deals with grant of authorization. The same are not being reproduced as they are not relevant for the instant case.
18. The endeavour by this Court is to analyse these provisions for coming to a conclusion as to whether the Board has the power to regulate pipelines which are being laid/intended to be laid by an entity for transporting its own petroleum and petroleum products, which are also sometimes referred as captive pipelines, in common parlance.
19. It is the case of the Petitioner that after the enactment of the PNGRB Act, transportation is completely regulated by the PNGRB and that IOCL could not have laid down any pipeline without taking permission or authorization from the PNGRB. Reliance has been placed on Clause 6.1 and Clause 6.2 of the 2002 Guidelines to contend that once the PNGRB was constituted, then the 2002 Guidelines does not survive and the PNGRB being the Regulator, will have the final say in all matters that are covered under the PNGRB Act and right of user of land can be given only to a person who gets the authorization from the PNGRB. It is the case of the Petitioner that if entities are allowed to operate without the involvement of the regulator, then the whole object of creating a Regulator would be defeated.
20. It is the case of the Petitioner that the concept of captive pipeline cannot continue after enactment of the PNGRB Act and captive self use pipeline has been done away with. It is the case of the Petitioner that a reading of the Regulations would lead only to one conclusion that even if an entity would desire to lay down a pipeline for self use, then it has to be a common carrier which has the capacity to be used by other entities as well. The argument advanced is that therefore a standalone self use pipeline is no more contemplated under the PNGRB Act.
21. To buttress this submission, reliance has been placed on Section 20 of the PNGRB Act to state that the Board has the power to declare any existing pipeline as a common carrier in a manner as is prescribed under Section 20 of the PNGRB Act. It is contended that Section 20 of the PNGRB Act is a very strong indicator that after the commencement of the PNGRB Act, only common carrier and contract carrier pipelines can be laid down by entities for transportation of petroleum and petroleum products and even the existing pipelines which were captive pipelines can be converted to a common/contract carrier in a manner as has been provided for in Section 20 of the PNGRB Act.
22. The learned Counsel for the Petitioner places reliance on Section 21 of the PNGRB Act stating that the effect of Section 21 PNGRB Act is that the entity laying, building, operating or expanding a pipeline for transportation of petroleum and petroleum products shall have the right to first use for its own requirement and the remaining capacity shall be used amongst entities as the Board may after issuing declaration under Section 20 of the PNGRB Act determine having regard to the needs of the competition in marketing and availability of petroleum and petroleum products throughout the country. It is, therefore, stated that the effect of Section 21 of the PNGRB Act is that pipelines can be laid for transportation of petroleum and petroleum products having provision of carrying petroleum and petroleum products for more than one entity.
23. The Petitioner also places reliance on Section 2(i) of the 2010 Regulations that a petroleum and petroleum products pipeline means a pipeline for transportation of petroleum and petroleum products and what is excluded are only those pipelines which are dedicated for supply of petroleum products to a specific consumer which are not for re-sale. It is contended that since IOCL intends to sell the petroleum products which is transported to the Vellur Terminal for re-sale purposes also, it would squarely be covered under the new regime warranting authorization from PNGRB. It is contended that the definition of the petroleum and petroleum products pipeline includes all pipelines which means any pipeline including a branch or spur line. It is stated that any kind of pipeline which is used for transportation of petroleum and petroleum products are covered under the petroleum products pipeline except those which are dedicated for supply to specific consumer and that too not for re-sale.
24. It is contended that since the definition of petroleum products pipeline in 2010 Regulations uses the expression “means and includes” and therefore the definition of petroleum products pipeline is exceedingly wide and IOCL could not have laid down its pipeline without getting the authorization of the PNGRB. It is the contention of the Petitioner that after the PNGRB Act came into force, every pipeline has to be only a common carrier and even after a person intends to lay down a pipeline for its own use, it can only have the right of first use and the entity laying down the pipeline would have to carry the petroleum product of other entities also in its pipeline as directed by the PNGRB.
25. It is the case of the Petitioner that the self use captive pipelines have been subsumed under Section 21 and after the lapse of the Guidelines since the concept of common carrier and contract carrier has been done away with, there was no need to specify it in the Act that captive carrier has been done away with. The Petitioner places reliance on a judgment of the Apex Court in Avishek Goenka v. Union of India & Anr., 2012 (5) SCC 321, to contend that something which is permitted is provided under the Act, and that which has not been specifically stated would be deemed to be excluded. It is stated that larger interest must be given preference over individual interest. It is stated that the IOCL in the present case is in violation of pressing its individual interest over the public interest and IOCL’s attempt to circumvent the bidding procedure by justifying the laying of their pipeline by stating that the same is for personal use cannot be sustained.
26. It is the case of the Petitioner that the PNGRB Act has been brought in to protect the interest of the consumers and to promote competitive markets. It is the contention of the Petitioner that since the Statement of Object and Reason and the Preamble of the Act provides that the purport is to increase competition in transportation of the petroleum and petroleum products, obviously the Legislature intended to do away with the concept of captive pipelines and, therefore, captive pipelines have not been mentioned in the PNGRB Act. It is stated that if the captive pipelines continue to exist even after the introduction of the PNGRB Act and the PNGRB and if captive pipelines are outside the ambit of the Regulator, then the entire purpose of the PNGRB Act gets defeated. The purport of the PNGRB Act is to set up a single Regulator to facilitate uninterrupted su