NEW DELHI SEPTEMBER 11, 2002: Indraprastha Gas Limited (IGL) finally admitted its incompetence to the Supreme Court. Facing severe censure by the Supreme Court, IGL has been discredited for manipulating projected sales, profits and costs to justify the recent hike in compressed natural gas (CNG) prices. IGL’s attempts to circumvent the April 5, 2002 Supreme Court Order that mandated the government of India to "make available" 16.1 lakh kg per day of CNG to meet the projected demand, has failed. The Court’s ruling endorsed projections made by the Ministry of Petroleum and Natural Gas (MoPNG) in April 2001.

IGL hiked prices of CNG following higher excise duties by MoPNG in February 2002. IGL’s move coincided with the April 2002 Supreme Court directive that reiterated its earlier order of converting all public transport buses to CNG. Following the price hike, the apex Court directed the Environment Pollution (Prevention & Control) Authority (EPCA) to investigate the price hike.

Under increasing pressure to justify the price hike to the EPCA, IGL made desperate attempts to blur details of cost, earnings and sales of CNG.

In its deposition to the Court, IGL made the following claims:

• IGL estimates that the demand for gas in Delhi is much lower than what the Supreme Court ordered to be made available. IGL estimates have now plummeted from 70 lakh kg of gas per bus per day to 51 lakh kg per bus per day. In addition, IGL has also lowered its estimates of growth in vehicle numbers. The idea behind lowering CNG estimates while underestimating vehicle growth is to reduce the overall projected demand for gas in the transport sector.

• Arguing for queue-less CNG dispensing facilities, IGL has tried to confuse the Court further by claiming that there is a difference between what it can compress and actually dispense – in sharp contrast to what it had told the Court earlier. In their recent submission, IGL contended that actual dispensing should be 45 per cent of actual compression capacity. IGL was censured because it misinterpreted the Court’s mandate to supply 16.1 lakh kg per day by blurring the distinction between compression and dispensing capacity.

Strangely, IGL’s new counsel, P Chidambaram brought these issues to the Court’s attention only recently. The Chief Justice bench was incensed by IGL’s misleading numbers and terminologies. The Court observed that nowhere in their earlier affidavits had IGL brought the difference between gas compression and actual dispensing to its notice.

The Supreme Court maintained the real reason for long and harrowing queues is not the availability of CNG but poor planning of gas infrastructure.

Nearly 30 per cent of the investment in dispensing and booster stations is wasted. Indicative of this is the serious imbalance in supply and dispensing capacities. About 60 per cent of the stations sell only 15 per cent of gas because they are not equipped with compressors, whereas 40 per cent of stations have to supply to 85 per cent of the total CNG demand.

This leads to concentrated queues in the stations that dispense more, a clear pointer that IGL has neither cared for the quality or efficiency of the dispensing stations when attempting to meet the Court’s target.

IGL has consistently ignored the fact that the Supreme Court ordered the conversion of 10,000 buses and other public transport vehicles to CNG in Delhi. The demand is bound to increase as more cars and autos will soon switch over to CNG, especially if the government provides incentives.