It's bogus: RNRL on gas pricing formula

There was no bankable pact signed for gas supply

“The formula must be made public and at the time of launch of NELP in 2003, the formula did not exist,” said Advocate Ram Jethmalani appearing before a bench headed by Chief Justice K G Balakrishnan.

Concluding his arguments, Jethmalani said the Rs 25,000 crore Dadri project did not come up as a bankable agreement was not signed for supply of natural gas for the mega power project.

The MoU was signed in 2005 and the project would have come up by 2008-09 at the time of supply of gas from the reservoir, if the agreement had been signed, he said.
He said Mukesh Ambani surrendered the marketing right, so that the natural gas was not supplied to Anil Ambani at $2.34. The policy of the government should not have any retrospective effect, rather it should be applicable prospective to the new consumers.

Quoting government documents and empowered group of ministers meeting minutes, he said that there was differences of opinion among the ministers on the fixing of price and supply of gas to RNRL. Few of the ministers had opposed the stand taken by the government in its petition, he said.

“Nowhere it is stated that government has a right to fix price. Contractor had a freedom to do so before production sharing contract and gas utilisation policy were launched,” he said. He said that the bid to sell gas to NTPC by RIL was submitted without the approval of the government and international tender bids are not to be subject to such approval from authorities.

Government has a greater responsibility and such arbitrary, unfair policy are subject matter of judicial scrutiny, he said. RNRL Advocate Mukul Rohtagi will start his argument on Wednesday.