ONGC moves ministry to seek overdue
ONGC asks Petroleum Ministry to take up recovery of Rs 1,396 crore for natural gas sold to HWP nearly two decades ago, reports Deepak Joshi.india Updated: Oct 24, 2006 04:55 IST
The Oil and Natural Gas Corporation (ONGC) has urged the Petroleum Ministry to take up the recovery of Rs 1,396 crore that the Baroda Heavy Water Plant (HWP) owes it for natural gas sold in a case that dates back nearly two decades.
ONGC Chairman and Managing Director RS Sharma, in a letter to petroleum secretary MS Srinivasan, has said, "As no progress could be made for recovery of the long outstanding dues from the Baroda HWP, we request the Ministry of Petroleum and Natural Gas to take up the matter with the Department of Atomic Energy to settle ONGC's long-standing dues."
ONGC directly supplied gas to the Baroda HWP from 1975 until the transfer of gas marketing functions to GAIL in 1992. The dispute between ONGC and the Baroda HWP relates to the period between January 1, 1982 and January 27, 1987, when the government started fixing gas prices. During this period, ONGC billed on what is called the "thermal equivalence basis" while the Baroda HWP made partial payment only at the old rate.
A gas supply agreement between ONGC and the Baroda HWP signed in 1991 provides that the government's decision regarding settlement of the outstanding pricing dispute arrears shall be binding on both the seller and the buyer.
"On account of differential payments, principal dues accumulated to Rs 59.02 crore. The total outstanding dues with compound interest up to March 2006 are Rs 1,395.79 crore (and at simple interest Rs 257.11 crore)," ONGC said in its communication to the Petroleum Ministry.
Companies outside the public sector have moved the courts on similar issues and even taken them to the Supreme Court.