The government has now officially been dragged to the Supreme Court in the Ambani brothers’ battle over the price and allocation of natural gas from the Krishna Godavari (KG) basin.
Mukesh Ambani run Reliance Industries Ltd (RIL), joining issue with Anil Ambani’s Reliance Natural Resources Ltd (RNRL) has in a special leave petition (SLP) filed in the court on Saturday made the government as one of the respondents in the case.
The government, being the owner of the gas produced, has in a technical sense all the powers and rights to determine the price, quantity and the buyer for the gas.
However, given the nature of the oil exploration and production sharing agreement involving private investment, there is another view that the government has no role to play in the case as this is a commercial dispute between two companies.
The government, thus far restrained, is now under pressure to clarify its views.
The Petroleum Ministry has already started holding consultations with the Law Ministry to firm up its views and also appoint a representative — which could either be the Solicitor General of India or the Additional Solicitor General.
Officials in the Petroleum Ministry said the government is also considering penal action against RIL for its pact with RNRL on supply of gas as this could be a violation of its production-sharing contract with RIL on the ground that it did not have a required government approval.
RIL has written to the petroleum ministry that it will abide by the production-sharing agreement (PSC).