'GAIL making illegal profits by diverting its share of KG gas'

A GAIL spokesperson declined to comment on the allegation.
Ramsinh Rathwa, a BJP MP from Gujarat, on October 14 wrote to Prime Minister Manmohan Singh that GAIL was allocated 2.59 million standard cubic metres per day of gas from the KG-D6 fields of Reliance Industries for extracting LPG.

"This allocation to GAIL was made according to the highest priority, because it was expected that this allocation would lead to a substantial increase in availability of domestic LPG," Rathwa wrote.

"Instead, LPG produced by GAIL remains at the same level as it was before the commencement of D-6 gas supply," he said.

GAIL, according to the MP, produced 1.09 million tonnes of LPG in 2008-09 prior to commencement of supply of KG-D6 gas. It began receiving KG-D6 gas in September, 2009, but produced only 1.10 million tonnes of LPG in 2009-10. Its output fell to 1.07 million tonnes in 2010-11, the first full-year of KG-D6 gas supply.

"What it (GAIL) did was that it quietly diverted this gas to such consumers who failed to secure gas allocation from the government," Rathwa alleged, adding that GAIL made a killing by selling KG-D6 gas, purchased at a price of USD 4.2 per million British thermal units, at the price of imported LNG, which ranges between USD 12 and USD 17 per mmBtu.|

Requesting anonymity, a company official said GAIL had been allocated a certain quantity of gas from the Western Offshore fields of ONGC and joint ventures like Panna/Mukta and Tapti for production of LPG. These supplies have fallen over the years, affecting the production of LPG. As such, the allocation from KG-D6 was intended to augment this output.

Rathwa wrote to the Prime Minister that urea production would been increased by 1.3 million tonnes, or 650 MW of power could have been generated, if the 2.59 mmscmd of KG-D6 gas allocated to GAIL was supplied to fertiliser or power plants.

"I will request to direct GAIL to refund to the exchequer illegal profits made by them during the last three financial years," he said. "This is another mega scam and cannot be ignored. I therefore suggest that the case be throughly pursued and investigated in public interest."