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Gas pricing: Ambani, Moily named in AAP govt FIR

india Updated: Feb 15, 2014 10:24 IST
HT Correspondent
Arvind Kejriwal

Petroleum minister M Veerappa Moily, Reliance Industries Ltd. chief Mukesh Ambani, former Union minister Murli Deora and retired director general of hydrocarbons VK Sibal were on Wednesday named in an FIR by anti-corruption branch of Delhi government in the Reliance gas price issue.

Names of Moily, Ambani, Deora and Sibal figured in the FIR, sources told PTI.

Kejriwal on Wednesday wrote a letter to Prime Minister Manmohan Singh, requesting him to keep in abeyance decision to hike gas price from April 1 till the probe in the case is completed.

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The development comes a day after Kejriwal directed the ACB to register an FIR against Reliance Industries Ltd (RIL) chairman Ambani, Moily, Deora and former director general of hydrocarbons VK Sibal for increasing the price of natural gas produced in India. The increase will cost the country Rs. 54,000 crore per year.

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Kejriwal’s move followed a complaint by former cabinet secretary TSR Subramaniam, former navy chief Admiral RH Tahiliani, former revenue secretary EAS Sarma and Supreme Court lawyer Kamini Jaiswal, which alleged that ministers and bureaucrats, in collusion with RIL, increased gas prices to give the company undue benefits of Rs. 1.2 lakh crore.

The Cabinet Committee on Economic Affairs had, in June last year, approved a gas pricing formula fixed by a committee headed by former RBI governor C Rangarajan. According to this formula, gas prices in India will rise from $4.2 per unit to $8.4 per unit from April 1 this year.

PSUs like ONGC and OIL produce 70% of India’s gas and so, will get the lion’s share of the benefits accruing from the higher gas prices. RIL’s KG-D6 block accounts for 15% of India’s gas production.

“The Delhi government’s direction to order the registration of an FIR in relation to the union cabinet’s decision to revise the price of gas is indeed shocking,” RIL said in a statement. “We deny these irresponsible allegations and propose to resort to available legal remedies to protect our reputation and preserve the pioneering efforts and investment made by Reliance so far.”

According to Moily, the higher price is necessary to attract more domestic and foreign investment in India’s oil and gas sector. “If we can import gas at $12-16 per unit, what’s wrong with paying half that price to domestic producers?” he had told HT in a recent interview.

But experts pointed that gas prices, unlike oil prices, vary widely throughout the world. In the US, it is available at $4.5 to $5 per unit.

“RIL’s partner Niko has a 25-year contract with the Bangladesh government to supply gas at $2.34 per unit,” Kejriwal said and questioned the role of the Congress-led UPA government in the decision as well as the BJP’s silence.

The logic: if companies can produce gas at lower prices elsewhere, it can also be done in India.

“In case this price hike is allowed to take place, it will make the life of the common man miserable since it will have a cascading effect on prices of transportation, domestic gas and even electricity,” Kejriwal said.

Reacting to the charge, Moily said: “I think I should sympathise with his ignorance. He should know how the government functions… how these things are done. There should be a system for fixing prices. Nothing is done without expert advice. If he (Kejriwal) can give some money, we will be very happy to reduce the prices.”

(With inputs from PTI)