Govt counters RIL charges on natural gas pricing
The Centre has strongly rebuffed the charges made by Mukesh Ambani's Reliance Industries Ltd (RIL) that government policies to keep domestic gas prices subdued (at $4.2 per unit of gas) and pay a higher price for imported gas (or LNG at $14-16 a unit) was resulting in a transfer of wealth to foreign countries.business Updated: Mar 05, 2012 01:21 IST
The Centre has strongly rebuffed the charges made by Mukesh Ambani's Reliance Industries Ltd (RIL) that government policies to keep domestic gas prices subdued (at $4.2 per unit of gas) and pay a higher price for imported gas (or LNG at $14-16 a unit) was resulting in a transfer of wealth to foreign countries.
The charges were made by V Balasubramanian, group president, RIL, in a recent memorandum submitted to the government regarding the pricing of gas from the KG D-6 fields, India's largest gas producing field.
Stating that the present domestic gas pricing policy benefits "the Indian people at large," the government has also damned another charge by RIL, which said that the current domestic gas sale price formula violates the public trust doctrine."Any changes in the gas price directly affect the crucial sectors of the economy, especially fertiliser and power sector, besides directly affecting the fiscal burden of the government," the petroleum ministry said in response to RIL's claims.
An increase of $1 in the price of gas translates into a burden of around R72 crore (for every 1 mmscmd of gas @ R50/$), the petroleum ministry said. "It cannot be stated that the current sale price formula fixed by the empowered group of ministers (EGoM) in 2007 violates the public trust doctrine quoted by RIL from the Supreme Court order as people at large are benefited through the price formula fixed by the EGoM."
Mails sent to RIL did not elicit any response. However, sources close to RIL said "it is an ongoing dialogue with the government and not a stand-off."
RIL had also quoted the Supreme Court's order in the 2G case saying that the people of India "have to be adequately compensated for the transfer of resources" and that "the doctrine of equality regulates the rights and obligations of the state vis-a-vis private parties seeking to acquire/use the resources and demand that the procedure adopted for distribution is just, non-arbitrary and transparent and that it does not discriminate between similarly placed private parties."
First Published: Mar 04, 2012 22:09 IST