RIL trying to inflate profit by demanding higher price: RNRL

Last Updated: Tuesday, December 8, 2009 - 18:00

New Delhi: Anil Ambani-led RNRL on Tuesday
accused the Mukesh Ambani group of scuttling its "unqualified"
rights to get gas at USD 2.34 per unit from the KG basin by
telling the Supreme Court that RIL was demanding a higher
price despite being assured of a whopping Rs.30,000 crore
profit at this rate.

"The submission of RIL that the gas can only be sold
at 4.20 per unit is only an attempt to inflate its profit. The
Government will obtain no additional benefit from such
pricing and the net effect will only be enrichment of RIL,"
RNRL told a Bench headed by Chief Justice K G Balakrishnan.

It contended that the supply of gas at USD 2.34 mmBtu
for 17 years will not cause any loss either to the government
or Mukesh Ambani group.

"There will be no impact on the Government at all and
it will suffer no loss whatsoever. RIL will also make a profit
of Rs.30,000 crore at this rate," RNRL said in an affidavit
before the Bench.

"In case the Government values the gas at 4.20 per
mmBtu and RIL sells gas to RNRL at the price of 2.34 per
mmBtu, the Government will still obtain its full share of the
profit on gas," it said before the Bench also comprising
Justices B Sudershan Reddy and P Sathasivam.

The Anil Ambani`s company alleged that RIL is trying
to impose a unilateral term requiring government approval of
the price which it claimed was not part of the contract
between them.

"RIL is seeking to impose a unilateral term requiring
government approval of price citing the terms of the PSC
(Production Sharing Contract)," senior advocate Mukul Rohatgi,
appearing for RNRL said adding "RNRL has an unqualified right
to get 28 MMSCMD for 17 years at the price of USD 2.34 mmBtu."

The Ambani brothers are engaged in a bitter court
battle over the supply and price of the gas from KG Basin.

While RNRL is seeking gas at a committed price of USD
2.34 per unit, RIL says it cannot honour the commitment made
in the 2005 family agreement due to government`s pricing and
gas policy.

Raising objections on the Government`s stand that the
arrangement for the supply and pricing of gas for NTPC cannot
be equated with a private agreement between RIL and RNRL, the
Anil Ambani group has accused the Centre of deliberately
causing "confusion" and hurting the interests of public sector
NTPC.

Rohatgi submitted that the price of USD 2.34 per unit
for supply of gas to NTPC by the RIL is the benchmark and RNRL
should also be supplied at the same rate.

PTI



First Published: Tuesday, December 8, 2009 - 18:00

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