Will RIL earn profit by selling gas at USD 2.34? : SC
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Last Updated: Wednesday, October 21, 2009, 18:44
New Delhi: The Supreme Court today asked RIL if it would make profit from selling gas at a price committed to power PSU NTPC, although it is substantially lower than the government-approved price, but there was no clear reply from the Mukesh Ambani-led firm.

Hearing the arguments of Reliance Industries, represented by counsel Harish Salve, the apex court raised the question: "You had bid USD 2.34 per mmBtu (for NTPC), you would have still made profits. Now when government is asking you to sell gas at USD 4.20 per mmBtu, then you will get huge profits."

In its response, RIL said that the price of the gas would not impact them as they are only recovering the cost and thereafter government gets the lion's share of profit.

The company also said that there is possibly no role for Kokilaben in mediation of the dispute, as the issue involved the production sharing contract and other technicalities.

The dispute pertains to RNRL's demand that it be supplied 28 mmscmd of gas from RIL's KG-D6 gas fields at a price of USD 2.34 per mmBtu agreed in a 2005 family MoU overseen by Ambani family matriarch Kokilaben.

RIL, however, contends that it cannot do so in view of the government policy, which in 2007 approved USD 4.20 per mmBtu as price for KG-D6 gas.

Salve said: "If RNRL is asking me to give gas at a lower price, then government will be debiting my account and I am recovering a lesser amount... I have no control on gas, price and choice of customers."

Bureau Report

First Published: Wednesday, October 21, 2009, 18:44

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