Govt justifies petition to nullify the gas pact

“If the MoU between the RIL and RNRL is not declared null and void other industries will be dependent on their mercy to get the scarce fuel,” Petroleum Secretary R S Pandey said here.

Seeking intervention in the ongoing legal battle between the two Ambani brothers over the supply of gas from the KG basin the government in its petition filed before the Supreme Court prayed that the MOU between the RIL and RNRL be declared “null and void” in the face of “enormous” national interest involved in the distribution of natural gas. The government argues that “the national economy cannot be allowed to be held hostages by the Ambanis.” In its appeal the government said that the gas produced from the KG basin if properly utilized “will promote the industrialization of the country.

Sovereign authority

However, the MoU between the two Ambani brothers made it appear that “all the gas will be owned by the RIL and RNRL and utilised at their discretion, the government said in its petition.  Pandey argued that “the government can always make use of its sovereign authority to intervene even in a private commercial agreement if it feels that such intervention is necessary to protect the sovereign national interest.”

The Production Sharing Contract clearly says that government will frame a gas utilization policy and approve pricing, he said. “There is a separate chapter in the PSC on gas. For crude oil production that is not the case. RIL can use the oil it produces at its refineries as the transfer price will be the prevalent international rates. But for gas that is not the case,” he said.

The government has already rejected RIL’s plea for using KG-D6 gas at its refineries and petrochemical plants saying gas to them would be considered when allocation to refinery and petrochemical sector is considered, Pandey said.

“If private MOU like that of between the RIL and RNRL comes into effect, other contractors may also frame such MOUs and appropriate the national assets among themselves,” he said.

“The government role is just not restricted to collected royalty and profit petroleum. Our role is also to see equitable industrial development,” Pandey said. He said the government felt the need to file a Special Leave Petition only after learning of the full implication of the “family MOU” between the RIL and RNRL from the Bombay High Court judgment.

DH News Service

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