What is the Reliance gas dispute all about?

What is the Reliance gas dispute all about?

At the core of the dispute is how valid is a family pact reached between the two brothers, brokered by their mother Kokilaben when the Reliance empire was split a few years ago, in deciding the price of gas in which the government, too, has claimed a share.

The fields, off the Andhra Pradesh coast, were won by Mukesh Ambani-led Reliance Industries, and are one of the biggest discoveries made in Asia in recent years. Anil Ambani wants a part of the gas for his group's power plants, based on the family pact.

But the ministry of petroleum and natural gas is not happy with the price at which Anil Ambani has asked for the gas -- between the time the family pact was reached in 2005 and now, hydrocarbon prices have more than doubled.

The government, based on the recommendations of a committee led by the present Finance Minister Pranab Mukherjee, had recommended the price of natural gas from the Krishna Godavari basin at $4.21 per unit.

Last month, the Bombay High Court asked Reliance Industries to supply 28 million units to Reliance Natural Resources for 17 years at $2.34 per unit after assigning 12 million units to the state-run National Thermal Power Corp.

Reliance Industries has challenged this verdict in the Supreme Court, even as the ministry of petroleum and natural gas has joined the dispute as part owner of the gas, and has called for the family pact to be declared null and void.

This stand has been contested by Reliance Natural Resources. It says the dispute has been depicted as one with the government, rather than one between the two companies, adding the government actually has little role to play in it.

All parties have filed their respective affidavits and stated their positions in the Supreme Court before Monday, which was the date fixed for commencement of hearing on what has turn out to be a high-profile corporate battle.

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