Centre seeks 8 weeks to respond to CAG report on RIL

Govt neither denies nor contradicts charges of gas price manipulation

“We will look into (the charges) and the concerned companies would reply,” said Union Minister for Petroleum and Natural Gas  S Jaipal Reddy.

In the backdrop of 2G spectrum allocation scam and a CAG report estimating a loss of Rs 1,76,000 crore to the public exchequer, the Centre took urgent steps to deal with the latest CAG report on production sharing contracts in the oil and gas field and limit the political damage.

Jaipal Reddy who replaced Murli Deora as Petroleum minister in the latest Cabinet reshuffle, has sought eight weeks time to reply to CAG queries. He said the ministry “would go by papers and files and documentary evidences.”

Deora, seen as pro-corporate, was inducted as Petroleum Minister in 2006 in the UPA-1. He retained the portfolio in UPA-2 in 2009  until he was replaced by Reddy earlier this year. He was seen to be close to RIL head Mukesh Ambani.

The gas row had brought the two  businessmen brothers, Mukesh Ambani and Anil Ambani, at logger heads with the latter charging the government (Deora) with favouring the RIL The CAG report  had indicted the government of favouring private oil firms, RIL and Cairn India. The CAG has charged the oil ministry with “irregularities and bending rules” to “oblige” RIL in the Krishna Godavari (KG) basin gas fields leading to a massive and yet “unquantifiable” loss to public exchequer.

The report has suggested “close nexus” between RIL, the oil ministry “bureaucrats” and its Director General of Hydrocarbons (DGH) which allegedly allowed RIL to hike the capital expenditure for KG basins by 117 per cent.  The capital expenditure was increased  from $2.4 billion to $8.8 billion adversely that resulted in revenue loss for the government, it alleged.

Answering queries on the alleged government-corporate nexus, Reddy said “we will respond to it.” Refuting Joshi's demand  that Home Minister P Chidambaram, who was the Finance Minister when the petroleum prices were increased, should resign from the Union Cabinet for allegedly favouring private companies, Reddy asked the BJP leader not to politicise the CAG report.

Claiming that the  report was just a draft, Reddy said Joshi and the CPI leader Sitaram Yechury were jumping the gun. “Murli Manohar Joshi as PAC chief is compromising his  position and is hunting for headlines. If the leakage is  breach of privilege of Parliament, he should give notice. The issue of pricing was cleared by the EGoM.  Joshi's charges on P Chidambaram is baseless,” he said.

Reddy also defended the DGH saying  the CAG report said the office should be strengthened as it is not capable of deciding on technical issues.