New Delhi, Aug 27 (Inditop.com) The Reliance Anil Dhirubhai Ambani Group Thursday welcomed the government stand to protect the interests of state-run power utility NTPC in its legal dispute with Reliance Industries over gas supplies from the Krishna-Godavari basin.
At the same time, the petroleum ministry has been requested to maintain the same uniform approach to another related legal dispute that involves the Anil Ambani group’s Reliance Natural Resources and Mukesh Ambani-led Reliance Industries.
Both NTPC and Reliance Natural Resources have sought uninterrupted gas supplies from Reliance Industries at $2.34 per unit for 17 years. They also maintain that valid pacts exist with the contractor regarding this.
In a letter to Petroleum Secretary R.S. Pandey, the Anil Ambani group expressed surprise that Reliance Industries once again sought to justify the high capital cost of nearly $9 billion to develop the Krishna-Godavari fields.
A surprise in equal measure was also expressed in the letter that the petroleum ministry defended the apparently inflated capital expenditure in a short span of just a day even though concerns were expressed over the credentials of people who validated the cost.
The letter, written by group president A.N. Sethuraman, also went on to state that the prices of natural gas had crashed 80 percent in the global markets from $13.58 per unit in July last year to $2.73 per unit as on Aug 24.
“As against this dramatic collapse in prices globally, the price consumers are paying for the Reliance Industries gas during the same period has moved in the opposite direction, and actually gone up by over 20 percent in rupee terms.”
The letter said this was primarily because the gas pricing in India is set in dollar rates, resulting in an unjustified annual increase at peak production of over Rs.3,700 crore.
“Over the expected lifetime of the Krishna-Godavari basin fields, this increase will amount to a staggering Rs.50,000 crore, even assuming that the exchange rate remains constant at current prices.”
The group also sought to question the stand of petroleum ministry that there was scarcity of gas in the country, even though Reliance Industries was producing much below the present capacity of 52 million units per day.
“This perception of scarcity – a totally artificially created phenomenon – is being exploited by Reliance Industries to extract a higher price of gas and make super normal profits,” the letter said.
Quoting unattributed media reports, the letter said the Reliance Industries was seeking to rely on the oil ministry’s affidavits in the Bombay High Court in the dispute with Reliance Natural Resources to strengthen its case against NTPC.
“Yet, the petroleum ministry it would appear is not considering intervening in the court case between Reliance Industries and NTPC,” the letter said, while adding the same stand was not being maintained in the dispute between two private corporate houses.
The petroleum ministry has filed a special leave petition in the Supreme Court with the plea that Krishna-Godavari gas was national property, even as the Bombay High Court was hearing the dispute between NTPC and Reliance Industries.
The apex court is set to hear the case Sep 1.
