RIL asks EC to review deferment of gas price hike

Hit hard by the Election Commission deferring gas price revision, Reliance Industries has written to the poll watchdog asking it to reconsider the directive as the decision to raise rates was taken months before polls were declared and even the Supreme Court has not stayed the move.

RIL Group President V Balasubramanian on April 2 wrote to the Chief Election Commissioner V S Sampath saying the revision of its eastern offshore KG-D6 gas price was a contractual necessity as the old rate of $4.2 expired on March 31.To decide on the rate to be effective April, 2014, the government had in 2012 constituted a committee under Prime Minister's Economic Advisory Council Chairman C Rangarajan. Based on its recommendations, Cabinet in June approved a new pricing formula.

The Cabinet on December 19 again approved applicability of the formula on KG-D6 fields and the Oil Ministry notified the formula on January 10.

“You will appreciate that the said (natural gas pricing) guidelines were notified well before the model code of conduct came into force (in early March),” he wrote.Giving a detailed account of how gas prices were set and what methodology was followed in the present case, Reliance Industries Ltd (RIL) said the Supreme Court is hearing a petition opposing the gas price hike on a day-to-day basis.

“The Honorouble Supreme Court of India has not granted any injunction or stay on revision of the gas price and as such there is no question of deferring the revised prices of gas on teh basis of the matter being sub-judice,” it said.

The Election Commission on March 24 asked the government to defer implementation of the formula, which would have nearly doubled the rates to $8.3 per million British thermal unit, on grounds that the matter is sub-judice.

“We trust that what is set forth above would clearly demonstrate the necesity for reconsideration of the decision of the Honourable Election Commission taken on March 24 and we earnestly request you to do so,” RIL added.