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No more gas for you: Mukesh

The ongoing Ambani brothers feud over gas has taken yet another turn with Mukesh Ambani managed Reliance Industries Ltd (RIL) issuing a notice to suspend gas supplies to Anil Ambani’s Reliance Infrastructure Ltd.

business Updated: Sep 24, 2009 21:00 IST
HT Correspondent

The ongoing Ambani brothers feud over gas has taken yet another turn with Mukesh Ambani managed Reliance Industries Ltd (RIL) issuing a notice to suspend gas supplies to Anil Ambani’s Reliance Infrastructure Ltd.

The September 22 notice served by RIL comes within days of Anil group entity saying it would not pay “illegal” marketing margins to Mukesh’s RIL.

Hitting back, Reliance Infra said that RIL was not entitled to disrupt supplies till the dispute over the issue of marketing margins being charged is resolved.

RIL has been supplying small quantities of gas to Anil’s power plant in Andhra Pradesh for the past five months in line with the allocations made by the government to 40 customers at $4.20 (Rs 206) per unit. On this price, RIL has been charging a marketing margin of $0.13 (Rs 6.37) per unit.

Reliance Infra had last week questioned the marketing margins being charged by RIL and had also informed RIL that it would not pay the same.

“The notice has been issued due to default committed by Reliance Infra in payment of the amounts due to RIL under the invoice for gas supplied during the first fortnight of September 2009,” said a RIL spokesperson.

“The notice issued is in accordance with the terms of the gas sale and purchase agreement (GSPA) executed between RIL and Reliance Infra.”

Reacting to the notice, Reliance Infra said, “You (RIL) are not entitled to suspend the supply (of gas) as long as we are making payment.”

“We are making due payment of the sale consideration at $ 4.20 per unit for supply of gas under the GSPA. We are not liable to make payment of any illegal and unauthorised charge.”

It also issued a warning: “You (RIL) will be entire responsibility for any loss or damage that will be caused to us (Reliance Infra) as a result of any ill-advised action taken by you.”