India: Analysis Of The Competition Act, 2002 v. The Petroleum And Natural Gas Regulatory Board Act, 2006

Last Updated: 13 March 2013
Article by Alaya Legal

The Competition Commission of India is a special national level expert body created under the Competition Act, 2002 to monitor and regulate competition across all markets in India and protect the interest of consumers in India. The Competition Commission has been provided with a legal framework to determine competition issues. In this regard, it has been vested with powers to undertake inquiries, summon and enforce the attendance of any person and examine him under oath, require the discovery and production of documents, receive evidence on affidavit, issue commissions for the examination of witnesses or documents, requisition any public record or document , call upon such experts from the field of economics, commerce, accountancy, international trade or from any other discipline as it deems necessary to assist the Commission in the conduct of any enquiry by it, direct any person, issue interim order, issue final order, impose penalty and has the power to regulate its own procedure.

There are various laws that have been enacted to regulate specific sectors and which have provided for the creation of sector specific regulatory bodies. The Petroleum and Natural Gas Regulatory Board Act 2006 has created the Petroleum and Natural Gas Regulatory Board to regulate the refining processing, storage, transportation, distribution, marketing and sale of petroleum, petroleum products and natural gas. It has also been established to protect the interests of the consumers and entities engaged in specified activities relating to petroleum, petroleum products and natural gas. The Board has to also ensure uninterrupted and adequate supply of petroleum, petroleum products and natural gas in all parts of the country and to promote competitive markets.

There are certain provisions of the Petroleum and Natural Gas Regulatory Board Act, 2006 that can potentially overlap with the functions of the Competition Commission. These provisions though provide for protecting interest of consumers through fair trade and competition do not however have any detailed legal framework to determine whether there has been violation of the competition principles. The extensive legal framework for determining the competition issues is provided for under the Competition Act.

Further, the policies of the Petroleum Regulatory Board seek to identify a problem in the beginning and create an administrative machinery to address behavioral issues before the problem arises whereas the competition policy addresses the problem afterwards in the backdrop of the market conditions. The competition legislation grants private right of action along with provision of damages. This ensures a qualitatively higher standard of consumer welfare which is unavailable under the legislative framework of the Petroleum Regulatory Board. In fact the right of private action is unclear under the various provisions of the PNGRB Act 2006. Unlike the Competition Act 2002, it does not define a person. There is also an absence of any guidance under the enactment to construe 'person'. Further, there is no possibility of recovery of any damages for anti-competitive conduct under the PNGRB Act.

In view of the observations highlighted above, it is clear that the Competition Commission of India is the main statutory authority regulating and evaluating competition issues in all markets in India and ensuring that no practice develops that has an adverse effect on competition in all sectors . The Petroleum And Natural Gas Regulatory Board in relation to competition issues should be allowed to refer matters to the Competition Commission of India.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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