Verdict vindicates our stance: Govt

Verdict vindicates our stance: Govt

Verdict vindicates our stance: Govt

Reacting to the Supreme Court verdict that upheld the government’s right to fix price of gas and decide its utilisation, Deora said “the apex court verdict upholds the fact that gas belongs to the government and the people of the country. This is the stand what we have been maintaining from the beginning.”

The Mukesh Ambani-owned Reliance Industries Limited (RIL) and Anil Ambani-owned Reliance Natural Resources Limited (RNRL) have been fighting over terms of supply of gas produced by the Mukesh Ambani Group in the KG basin to the Anil Ambani Group as stipulated under the family sponsored Memorandum of Understanding (MOU), which was struck when the Reliance empire was split in 2005.

When the dispute reached the Supreme Court in July last year, the Centre made a  petition to intervene in the case, arguing that the natural gas is national property and that the private agreement between the Ambanis over the gas is not valid.

Fair decision

The government in its petition prayed that the MoU between the RIL and RNRL be declared “null and void” in the face of “enormous” national interest involved in distribution of natural gas. Power Minister Sushilkumar Shinde also welcomed the Supreme Court verdict saying it was a “fair decision”.

“It will have no bearing on the gas supply dispute between the NTPC and the RIL,” he said.

NTPC legal tussle

The state-owned NTPC is currently having a legal tussle with the RIL  seeking supply of 12 mmscmd gas for its Kawas and Gandhar projects at US$2.34 per mmBtu.

The NTPC claims that the RIL had quoted the gas price at US$2.34 per mmBtu in response to the tender floated in 2004.

The RIL though initially agreed to supply gas to the NTPC at the rate of US$2.34 per mmBtu subsequently said it would supply the gas to the power sector PSU at the rate of US$4.2 per mmBtu—a price fixed by the Empowered Group of Ministers (EGOM).