RNRL has no right to trade gas: RIL

RNRL has no right to trade gas: RIL

"Trading in gas is also barred by Government’s policy that KGD6 gas can only be sold to priority end users identified by the government,’’ said the RIL affidavit filed today before the Supreme Court.

RIL asked the Apex court to dismiss the prayer of RNRL which has sought immediate supply of gas to it in accordance with the memorandum of understanding between Mukesh Ambani’s RIL and his younger brother Anil’s RNRL.

The affidavit filed by P H Parekh on behalf of RIL said RNRL does not have existing plants capable of using the gas and it wants gas to trade it for making enormous profits based on the below market acquisition price of $2.34. RIL could not supply gas to RNRL without the approval of the government. ‘’If  RNRL’s demands were granted, the government would lose large sums of money in profit sharing, royalties and taxes,’’ it said.

If gas was supplied to RNRL at the agreed price, it would reap a windfall at the expense of the government and RIL and its shareholders, it said. RNRL is demanding 28 mmscmd of gas from RIL for 17 years at a price of USD 2.34 per mmBtu, which is 44 per cent lower than the government-approved rate.

Apprehending that the gas could only be used by RNRL to trade, RIL said trading in gas is also barred by the government policy, under which KG-D6 gas can only be sold to priority end users which have existing facilities to consume gas and users identified by the government.