SC tells Centre to issue norms for gas pricing

SC tells Centre to issue norms for gas pricing

The Supreme Court on Friday asked the Union government to place on record fresh guidelines replacing the previous UPA dispensation’s policy on price fixation for natural gas, including that from Krishna-Godavari basin.

A three-judge bench presided over by Justice T S Thakur also asked the Centre to submit its response on a plea made by NGO “Common Cause” on a draft CAG report suggesting Reliance Industries (RIL) allegedly “hugely over-estimated” the reserves of the KG gas block and other irregularities.

The gas pricing issue had been brought before the court by a bunch of PILs filed in 2013 by senior CPI MP Gurudas Dasgupta and others. Solicitor General Ranjit Kumar told the apex court that the government has issued new guidelines which would not be as per the formula for gas pricing recommended by C Rangarajan Committee.

The Centre’s response came on a question raised by the court on September 18 asking it to make its stand clear on fixation of the price for gas from Krishna-Godavari basin as to whether it would adopt the UPA dispensation’s policy or make any departure from it.

The Solictor General said “new domestic natural gas policy” was approved by the government on October 18 raising natural gas price to $5.61 per mmBtu from November 1 and “recommendation of the Rangarajan Committee would not be given effect”.

The Rangarajan formula on gas pricing was approved by the previous UPA government. Rangarajan was chairman of the Economic Advisory Council to the then prime minister.
The bench was hearing the pleas challenging the UPA government decision to double the price of natural gas from $4.2 to $8.4 dollar per mmbtu and seeking cancellation of RIL’s contract for exploration of oil and gas from the KG basin.

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