RIL under CVC lens for levy on KG-D6 gas
After a rap on the knuckles from CAG, Mukesh Ambani's Reliance Industries Limited is now under the scanner of the Central Vigilance Commission over the gas that it supplies from its KG-D6 block to fertiliser companies. Anupama Airy reports. Gas attackbusiness Updated: Sep 13, 2011 22:40 IST
After a rap on the knuckles from government auditor Comptroller and Auditor General (CAG), Mukesh Ambani’s Reliance Industries Limited (RIL) is now under the scanner of the Central Vigilance Commission (CVC) over the gas that it supplies from its KG-D6 block to fertiliser companies.
The CVC's investigations pertain to the marketing margins that RIL is charging for its KG-D6 gas.
While RIL’s spokesperson refused any official comments, an August 24 letter by RIL’s vice-president B Ganguly to the petroleum ministry justified the levy that the company is charging, and said marketing margins are always charged on top of the ‘delivered’ or ‘landfall’ gas price and must be settled between the seller and the buyer based on the Gas Supply and Purchase Agreement (GSPA).
Reliance was already fighting the marketing margins issue with the oil and gas regulator (the Directorate General of Hydrocarbons) which refused to approve RIL’s accounts for 2009-10 over the issue.
On every unit of KG-D6 gas sold by Reliance, the company is charging a marketing margin of $0.135/unit from its customers in the power stations and fertiliser sector. The final price of RIL’s KG-D6 gas after including the marketing margins for KG-D6 gas for the core sector consumers is thus $4.335 per unit — as against the government approved $4.2 per unit.
As RIL’s accounts have taken $4.335 as the unit cost price of gas, the DGH has refused to clear its accounts.
The CAG, in a report released last week, had accused Reliance of violating the production sharing contract (PSC) with the government for its KG-D6 gas block — a charge which the company has strongly refuted.
First Published: Sep 13, 2011 20:32 IST