New Delhi, Dec 1 (Inditop.com) Quoting from a host of documents, mainly the oil ministry’s answers in parliament, Reliance Natural Resources Ltd (RNRL) Tuesday told the Supreme Court that Reliance Industries Ltd (RIL) has full marketing freedom on Krishna-Godavari gas.
The oil ministry in their numerous answers to questions on the issue inside and outside parliament has given unqualified reply that the contractor, the Mukesh Ambani-led RIL, has complete freedom to market the natural resource, RNRL counsel Ram Jethmalani said.
It was only later that the oil ministry sought to convey an impression, albeit unsuccessfully, that the pricing of natural gas by RIL was subject to some government control, Jethmalani told the bench of Chief Justice K.G. Balakrishnan, Justice B. Sudershan Reddy and Justice P. Sathasivam.
The three-member bench has been hearing the dispute over the supply of 28 million units of gas for 17 years at $2.34 per unit to Anil Ambani-led RNRL from the gas fields off the Andhra Pradesh coast, awarded to Mukesh Ambani’s RIL.
The price, tenure and quantity were based on the 2005 family pact, but RIL subsequently said it could only sell the gas for $4.20 per unit, as this was the price, the company claimed, fixed by the government.
The Bombay High Court had earlier ruled in RNRL’s favour.
“In terms of the production-sharing contract signed by the government under the new exploration licensing policy regime, the operators have the freedom to market gas within India, including Uttar Pradesh,” said Jethmalani.
This, he said, was the answer of former minister of state for petroleum Dinsha Patel in Rajya Sabha Aug 21, 2007, in reply to a question on the “gas source for Dadri power plant” by Samajwadi Party MPs Amar Singh and Abu Asim Azmi.
“Obviously, the minister’s answer on contractor’s right to supply gas is unqualified and uncontrolled by anything,” Jethmalani added.
Among the replies to various questions in parliament on the issue of “criteria for price fixation on gas from the Krishna-Godavari basin” that Jethmalani read before the bench, included one by Petroleum Minister Murli Deora in Rajya Sabha Nov 20, 2007.
“The production-sharing contract provides for pricing of gas on the basis of sales on arms length principles,” the RNRL counsel told the bench, quoting from Deora’s reply.
“The formulae or basis on which the prices shall be determined for the purposes of determining the government stake is required to be approved by the government prior to the sale of natural gas to the consumers/buyers.”
Jethmalani again pointed out to the court that as per this answer, “a formula for pricing needed to exist,” which, however, “did not exist at all”.
“So the question of the approval does not arise at all and the conduct of the government is eloquent.”
The RNRL counsel also argued that the date on which the contract was signed between the government and RIL, there was no gas pricing policy and the government cannot subject the pricing to a policy, made later but implemented with retrospective effect.
