Govt happy as SC says it owns gas
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Last Updated: Friday, May 07, 2010, 21:09
New Delhi: The government today welcomed the Supreme Court verdict that upheld its right to fix price and usage of gas, saying the fuel was a national asset that is to be used for larger good of the people of the country.

Oil Minister Murli Deora, who faced flak for intervening in the gas dispute between the Ambani brothers, welcomed the Supreme Court verdict saying the government stand that gas belongs to the nation has been vindicated.

Supreme Court said that the Ambani family MoU seeking to divide gas between Reliance Industries and Reliance Natural Resources Ltd was not binding, both legally and technically.

"I welcome the verdict. No matter what campaign one ran against the government, the nation is supreme," he said without naming Anil Ambani group which had cast aspersions on his ministry for allegedly siding with Mukesh-led RIL.

The government last year moved the apex Court asserting its sovereign right on pricing and utilisation, even as RIL said that it had fixed the gas price at USD 4.20 per mmBtu as per the government policy.

The government's intervention in the case had made Deora the target of attack with Anil Ambani group carrying front page advertisements in newspapers, accusing his ministry of trying to bailout RIL from its obligation under the Ambani family MoU to supply 28 mmscmd of gas to RNRL at a price of USD 2.34 per mmBtu.

Finance Minister Pranab Mukherjee said the judgement was "good", while Power Minister Sushilkumar Shinde termed the verdict as "fair", while making it clear that it has no bearing on state-owned NTPC's battle for gas with RIL.

The rate RNRL claimed is the same that RIL had bid in a 2004 NTPC tender to supply 12 million standard cubic meters per day of gas to the state utility.

The contract for supply could not be concluded over differences on terms and NTPC has dragged RIL to Bombay High Court seeking performance of the contract.

"It has nothing to do with my case of NTPC against RIL. No reference has been made on the dispute in the court judgement," Shinde said.

He declined to comment on the supply dispute between RIL and RNRL, saying it was a matter between two brothers.

When asked about the Supreme Court upholding government's right under PSC, Shinde said: "It is a fair decision."

Shinde said he was "part and parcel" of the ministerial panels that first approved USD 4.20 per mmBtu price of RIL's KG-D6 gas, fixed priority and users of the fuel and then decided to appeal against the Bombay High Court decision.

Law Minister M Verappa Moily said the verdict was "vindication of the government's sovereign and constitutional rights" over natural gas resources of the country.

"Which side the judgement has gone? I am not making any comment on that. But it is very clear that the stand, which was taken by the government, particularly the Petroleum and Natural Gas Ministry, has been vindicated and reiterated by the Supreme Court," he said.

Minister of State for Fertiliser Srikant Jena also seconded Moily.

"The Supreme Court judgment in RIL-RNRL dispute has re-affirmed the government's stand that natural gas is a national asset and the government is its legal owner," Jena told PTI here.

"The verdict will provide more stability and predictability to domestic gas prices in the country and boost investors' confidence," he added.

The fertiliser sector will also stand to gain as it already enjoys the highest priority in allocation of gas, he said.

Former Petroleum Minister Ram Naik today welcomed the Supreme Court ruling.

"When the New Exploration Licensing Policy (NELP) was introduced by me as Petroleum Minister, we had very clearly said that the Explorer will be the licensee and he will have the freedom to sell the gas at market determined price subject to the approval of the government as per gas distribution policy," Naik said.

The private MoU would distort the marketing arrangements, he said.


First Published: Friday, May 07, 2010, 21:09

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