UPSC Prelims 2025 Q60: Indian Economy – Infrastructure & Industry
Consider the following activities:
I. Production of crude oil
II. Refining, storage and distribution of petroleum
III. Marketing and sale of petroleum products
IV. Production of natural gas
How many of the above activities are regulated by the Petroleum and Natural Gas Regulatory
Board in our country?
- (a) Only one
- (b) Only two
- (c) Only three
- (d) All the four
Answer: (b) Only two
Explanation
PNGRB Regulatory Scope:
| Activity | Regulated by PNGRB? | Why |
|---|---|---|
| I. Production of crude oil | NO | Crude oil production is regulated by the Directorate General of Hydrocarbons (DGH) and governed by the Oilfields (Regulation and Development) Act, 1948 - NOT PNGRB. |
| II. Refining, storage and distribution of petroleum | YES | PNGRB regulates petroleum and petroleum product pipelines including refining transportation, storage facilities, and distribution infrastructure. |
| III. Marketing and sale of petroleum products | YES | PNGRB regulates the retail marketing of notified petroleum products (like LPG, CNG, PNG) to ensure fair access and prevent monopolies. |
| IV. Production of natural gas | NO | Natural gas production (upstream sector) is regulated by DGH + Ministry of Petroleum, not PNGRB. PNGRB handles the midstream/downstream - transportation and distribution of natural gas. |
PNGRB regulates II and III = Only two
Petroleum Regulation Framework:
| Sector | Regulator |
|---|---|
| Upstream (exploration, production) | DGH + Ministry of Petroleum |
| Midstream/Downstream (refining, pipelines, distribution, retail) | PNGRB |
| Pricing of petrol/diesel | Central Government (deregulated to market) |
| LPG/Kerosene pricing | Central Government (subsidised) |
Answer: (b) Only two.
Why each option is right or wrong
- (a) Incorrect. 'Only one' would mean PNGRB regulates just one activity. Both refining/storage/distribution AND marketing/sale fall under PNGRB's downstream mandate.
- (b) CORRECT. PNGRB (established under PNGRB Act 2006) regulates midstream and downstream activities: refining/storage/distribution (II) and marketing/sale (III). Crude oil production (I) and natural gas production (IV) are upstream activities outside PNGRB's scope.
- (c) Incorrect. 'Only three' would include either crude oil or natural gas production under PNGRB. Both are upstream activities regulated by DGH, not PNGRB.
- (d) Incorrect. 'All four' would mean PNGRB regulates crude oil and natural gas production — these upstream activities fall under DGH and Ministry of Petroleum, not PNGRB.
Key point
PNGRB = downstream/midstream regulator (pipelines, distribution, retail marketing). Upstream (production of crude oil + natural gas) = DGH, not PNGRB.
Remember
PNGRB regulates midstream/downstream ONLY: pipelines, storage, distribution, retail. Crude oil and natural gas PRODUCTION = DGH (upstream). Not PNGRB.
Common mistakes
- Assuming PNGRB regulates the entire petroleum sector including production — PNGRB was created specifically for the midstream/downstream segment.
- Thinking natural gas distribution and natural gas PRODUCTION are both under PNGRB — production is upstream (DGH), distribution is downstream (PNGRB).
- Forgetting that DGH (Directorate General of Hydrocarbons) is the key upstream regulator for oil and gas exploration and production.
Exam tip
PNGRB = Petroleum and Natural Gas Regulatory Board = downstream only. Think of the pipeline: well → [DGH controls here] → refinery → [PNGRB controls here] → petrol pump. PNGRB starts after the oil/gas comes out of the ground.
Sources
- Petroleum and Natural Gas Regulatory Board Act, 2006
- Oilfields (Regulation and Development) Act, 1948