Indraprastha Gas Ltd. surged by a record in Mumbai trading after a court said the industry regulator doesn’t have the jurisdiction to set prices for transporting natural gas.
Indraprastha, the seller of gas in New Delhi, gained 29 percent to 249.15 rupees at the close, the most since Dec. 29, 2003, when the company’s shares were listed. Gujarat Gas Co. climbed 15 percent, the most in 18 years, and Petronet LNG Ltd. advanced 8.5 percent, the biggest gain since July 21.
The Petroleum & Natural Gas Regulatory Board “is not empowered to fix or regulate the maximum retail price at which gas is to be sold by the entities,” Judges A.K. Sikri and Rajiv Sahai Endlaw of the Delhi High Court said in New Delhi today. “The board is also not empowered to fix any component of network tariff or compression charges for any entity such as the petitioner having its own distribution network.”
Indraprastha appealed in court after the regulator cut pipeline transportation rates in New Delhi by 63 percent and gas compression prices by 59 percent, according to an April 9 order. The changes were to have been effective from April 1, 2008.
“This removed a lot of the dark clouds hovering over city gas distribution companies,” said Deepak Pareek, a Mumbai-based analyst at Prabhudas Lilladher Pvt. “It’s a big positive for them and so the stocks are rallying.”
The order would have required Indraprastha to refund 18 billion rupees ($322 million) to customers. The company posted a net income of 3.07 billion rupees in the year ended March 31.