The Bombay high court on Friday rejected a petition filed by Welspun Maxsteel Ltd and Ispat Industries Ltd challenging reduction in compressed natural gas supplied to them by Reliance Industries Ltd (RIL) from Krishna-Godavari (KG) basin D-6 field production.
The steel majors moved the court challenging a communication issued by the ministry of petroleum and natural gas (MoP&G) on March 30, 2011, following which RIL reduced their CNG supply from May 9, 2011.
While the supply to Welspun Maxsteel was reduced from 0.9 million standard cubic meters per day (mmscmd) to 0.24 mmscmd, that of Ispat Industries was reduced from 1.35 mmscmd to 0.75 mmscmd.
The petitioners contended that once an allocation of CNG was made and producers entered into gas sale and purchase agreements, the supply should not be curtailed, and the MoP&G created confusion between allocation and priorities, and misinterpreted broader policy.
A division bench of chief justice Mohit Shah and justice Girish Godbole discarded the contention noting that since December 2010 even core sectors having utmost priority were not being supplied with allocated quantity of CNG, and the production, allocation, distribution and sale of natural gas involved wider financial implications for the core and non-core sectors, general public, the centre and the state governments.