New Delhi: Reliance Industries, the target of allegations of making super-normal profits, has sought to turn the tables on Anil Ambani group by accusing it of trying to earn an astronomical Rs 350,000 crore as profit with plans to trade gas bought at below market rates.
Anil Ambani Group's Reliance Natural Resources Ltd (RNRL)
wants RIL's KG-D6 gas at preferential price of USD 2.34 per
mmBtu but would supply the fuel to the group's power firms at
market rates, thus making Rs 21,000 crore profit a year for 17
years, RIL said in reply to the petition filed by the firm.
RIL annexed RNRL's offer document for a GDR listing that
said it will supply gas to its affiliate power companies at
prevailing market prices. "Such market prices may exceed the
Government-approved cap price of USD 4.20 per mmBtu (for KG-D6
gas)."
In addition, RIL claimed the Anil group's power company
that is setting up the Dadri plant in Uttar Pradesh, would
make a windfall profit of Rs 70,000 crore as the entire fuel
cost (the price at which it gets gas from RNRL) will be passed
on to the consumer.
Citing the State Support Agreement signed in 2004 between
the Uttar Pradesh government and Reliance Energy, RIL said
Dadri project will get a fixed cost tariff of Rs 1.25 per
unit, twice the industry norm for gas-based projects.
Earlier, RNRL had accused RIL of trying to make
super-normal profit of Rs 50,000 crore by selling gas at
higher price.
"Thus, all actions of RNRL are clearly motivated by
commercial greed, with the goal of pocketing trading profits,"
RIL said.
"This is proven beyond doubt by the fact that RNRL
contended before the Division Bench of Bombay High Court that,
if RNRL does not receive gas from RIL, it should receive cash
payments equal to the difference between the USD 2.34 per
mmBtu price and the price set by the government," the Mukesh
Ambani-led company said.
RNRL is seeking gas from RIL at a price of USD 2.34 per
mmBtu, agreed in a 2005 family agreement. RIL has expressed
its inability to supply at this rate as it is 44 per cent
lower than the government approved price. The matter is in
Supreme Court, which will commence final hearing on all
related petition from October 20.
"This (demand) confirms that RNRL's true objective is a
long term stream of subsidy payments at the expense of RIL's
shareholders," the company said.
Bureau Report
First Published: Wednesday, October 07, 2009, 18:27