Pricing natural gas is a vexatious challenge anywhere, absent gas to gas competition. In India’s fuel-stressed economy, there is considerable confusion as to whether fuel-pricing is too strategic to be left entirely to markets. Thus we have a curious situation where there are multiple prices — some administered and others market determined - for natural gas, an undifferentiated commodity.
Over the years, a combination of circumstances, some inadvertent and others less so, has confounded an already tricky exercise. Consequently, the gas sector has been laid open to manipulation and subversion by powerful stakeholders, leading to price distortions. With the Supreme Court declaring natural gas a national resource to be used for the public benefit, gas pricing, which is best left to markets, has re-entered the remit of the sovereign, if only through the backdoor. Pricing a fuel that is not amenable to domestic or international benchmarks is a daunting task even for governments. The Indian government can hardly be blamed for hiding behind an expert committee to pass the buck. But did the government actually pass the buck or did it use the committee as a smokescreen?
Paranjoy Guha Thakurta et al have waded bravely, meticulously and expertly through the arcane texts and sub-texts of the various government orders, media reports, cabinet notes, file notings, court judgments, committee reports etc to find an answer. Systematically marshalling every piece of published evidence they can muster, fortified by some ‘’exclusives’ as they claim, the authors go on to construct a plausible scenario in which crony capitalism hijacks gas pricing and imperils the country’s energy security.
Gas Wars is, at the least, a fascinating chronicle of the ways in which loopholes in the system were blatantly exploited by Reliance Group to its advantage, loopholes which according to the authors, were deliberately retained in the system by various players along the chain. This book traces the evolution of the most sordid and spectacular corporate spats in Indian history between the two Ambani brothers after the patriarch Dhirubhai died intestate. Crucially, it follows the alleged machinations and manipulations of the various players in the gas game – politicians, bureaucrats, technocrats and media included.
Like in all games, there are winners and losers. Thakurta’s analysis, buttressed by documentation and interviews with stakeholders walks us through the policy corridors to reveal the winners and losers, among the latter, at least two cabinet ministers who lost their jobs and a whole host of gas consumers with stranded capacity. The authors reveal how in this game of crony capitalism, the teams are so mixed up that no one knows who is playing which side and the umpires — be they the regulator or the government — are either blind or mixed up.
But the winner does not walk away with the spoils even after such deft manoeuvring. At least not yet. As the authors point out, the Indian polity is no banana republic. Crony capitalism has its detractors too — in the form of institutions like the CAG, the Election Commission, the higher judiciary and individuals that include honest bureaucrats and even an occasional gutsy journalist supported by an independent editor. Gas pricing is not an easy question to deal with even for an expert, but the CAG and the court dealt with it not just with adroitness, but with admirable competence as well. Thakurta’s book traces the role played by these institutions and individuals who stood their ground against the Reliance juggernaut.
After adducing copious and credible evidence to substantiate their thesis on crony capitalism, the authors throw up their hands in despair and even declare that crony capitalism is inescapable in the context of mineral resources. “Oil, gas and other hydrocarbons are the most politicised commodities on the planet we live in, whether these be situated in the U.S., in Uganda or in India. Like the governments of many other countries, that the government of India should prefer to place corporate interests before consumer interests should not surprise, for, that is the way the world’s largest democracy has been functioning for quite some time now … what has been truly amazing about the controversies relating to extraction of natural gas from Krishna-Godavari basin was the brazen manner in which the interests of the largest privately-owned company in India were sought to be equated with ‘’national interests’ by the government “. But surely, wherever it flourishes, crony capitalism does don a fig leaf, doesn’t it?
While the gas pricing controversy has engaged the Indian media for several months now, there is palpable reluctance to go beyond the surface and analyse the many factors at play. In fact, there is a conspiracy of silence on the manner in which gas policy and pricing are being manipulated to serve narrow ends. This book brings the much needed analytical outlook to the controversy, dissecting the ugly underbelly which the pretty pink papers pretend does not exist.
There is a wealth of information in this book and the appendices are truly an archival cornucopia. The authors have drawn heavily upon the deep knowledge, insights and wisdom of many experts and collated them to construct their thesis. Many individuals have been extensively cited in the book, based on interviews as well as correspondences. Notable among them are late Subir Raha, former Chairman and MD of ONGC, India’s flagship public sector exploration company, Mani Shankar Aiyar, an outspoken and upright former petroleum minister of cabinet rank and Surya P. Sethi, a senior advisor in the Planning Commission known as much for his controversial views on the way government policies are formulated and implemented as for his encyclopaedic knowledge of the sector. The views and opinions expressed by Subir Raha whom the authors consider ‘the insider’ in exploration business (quite rightly so) have been devoted an entire chapter — also captioned ‘The insider’. But much of what Mr. Raha revealed to the authors turns out to be unexciting, familiar and somewhat obfuscatory.
The book reproduces the views of various experts without comment, but there is little doubt about the conclusions and convictions of the authors themselves. The chapters tend to veer back and forth in time rather than trace a chronological thread which would have given the narrative greater clarity. Besides, the book addresses neither the expert nor the lay reader. While experts might find much of the information redundant and a bit too simplistic, the novice reader is inundated with too much technical detail as to smother a good story.
This book is surely one of the many questioning voices that seem to have stopped gas price revision in its tracks. The Modi government has refrained from operationalising the price revision decision already taken by the previous government. In all likelihood, another expert committee will again go into the beleaguered gas pricing issue to come up with a fresh set of recommendations!
Gas wars — Crony Capitalism and the Ambanis: Paranjoy Guha Thakurta with Subir Ghosh and Jyotirmoy Chaudhuri; Feel Books Pvt. Ltd., 4737/23, 3rd Floor, Ansari Road, Daryaganj, New Delhi-110002. Rs. 695.
