Ambani pact scoffs at govt authority, says oil ministry

Responding to comments sought by the Prime Minister’s Office on a letter from Anil Ambani, the ministry last week wrote that the family MoU was clearly against the provisions of the Production Sharing Contract (PSC) and will ‘harm the public interest’.

“The SLP was also to protect policies approved by the government, and its sovereign ownership rights under the Constitution and its right to make policies for regulation and development of vital resources like natural gas for the benefit of people/consumers at large and in the overall interest of the national economy,” it added. It said that any private arrangement to distribute natural gas for private business plans is nothing but monopolising a vital natural resource and will set a bad precedent under which production from other fields may also be appropriated.

Freedom to market
Quoting articles of the PSC that companies like RIL sign with the government for exploration and production of oil and gas, the ministry said: “Natural gas has to be sold as per the Gas Utilisation Policy of the governnment... RIL’s freedom to market as per the PSC, is subject to the Gas Utilisation Policy (outlining sectoral priorities) and the pricing formula to be approved by the government.”

The ministry said several consumers and stakeholders such as Department of Fertilisers, Chief Minister of Andhra Pradesh and some power companies have expressed apprehension about the availability of gas in the wake of the Bombay High Court judgment.