Gas supply only at govt rate, says Mukesh firm

Gas supply only at govt rate, says Mukesh firm

Fuel cannot be retailed at a price being sought by Reliance Natural

An RIL spokesperson said that the company has filed its reply to the government’s petition on the gas dispute. In the petition, the company accepted the oil ministry’s contention that natural gas from KG-D6 fields can only be sold to users identified by the government.

The company said gas cannot be sold to different consumers at different rates and there cannot be different prices for sale to consumers and for valuation purposes. RIL expressed its inability to supply gas at US$2.34 per mmBtu (a rate 44 per cent lower than government fixed price of US$4.20 per mmBtu) to Anil Ambani Group firm RNRL, which had taken the Mukesh Ambani firm to Supreme Court seeking gas for group power plants in accordance with a 2005 family agreement.

It said the commitment under the 2005 family MoU, to supply 28 million standard cubic meters per day to RNRL, was subject to government approval.

On the Bombay High Court directing RIL to meet the commitment made in the 2005, RIL said: “The order of the Division Bench (of Bombay High Court) has put RIL in a position of having to breach the Production Sharing Contract and violate the government’s policies.”
Going against the PSC would jeopardise RIL’s huge investment of Rs 38,000 crore in gas exploration and development, the company contended.

Incur losses

“If forced to sell gas at a price significantly lower than the government-approved price — which RIL said it cannot do under the PSC, RIL would incur huge losses, making the whole project unviable,” the reply said.

The government in its SLP stated that the two brothers had tried to divide national resource through a private agreement and the national economy would be held hostage to their benevolence.

“RIL has, at no stage, attempted to act to the detriment, or contrary to the interest, of the Union of India or apportion, much less appropriate, any property or asset of the Union of India to itself,” the affidavit said. “RIL is selling KG-D6 gas strictly in accordance with the allocations made by the government and at the government-approved price.” It said its agreement with RNRL to sale of gas was subject to government approvals.

There’s no hanky-panky, says regulator

Facing allegations of approving Reliance Industries’ inflated gas field costs that could hurt government revenue, oil regulator Directorate General of Hydrocarbons (DGH) on Wednesday, launched an advertisement campaign saying the exchequer would get US$16.57 billion compared to US$9.5 billion for the company. DGH, through full-page advertisements, said that the capital expenditure at RIL’s KG-D6 field had gone up from US$2.47 billion to US$8.8 billion due to a three-fold rise in plant capacity, doubling of output, 16 additional wells and a host of other facilities.