Even as arguments in the Reliance gas dispute case was on in the Supreme Court between the two Ambani brothers, the Anil Ambani group’s Reliance Natural Resources Ltd (RNRL) on Tuesday filed a fresh affidavit opposing the Centre’s intervention in the matter.
The affidavit said “the stand of the Ministry of Petroleum and Natural Gas, Government of India, is dishonest and collusive. If the Government of India is made a party, RNRL’s right to full discovery, inspection and cross examination will have to be preserved.”
Referring to Mukesh Ambani group’s Reliance Industries Ltd’s contention that the government’s gas pricing policy would prevail over the MoU, it said the production sharing contract (PSC) between RIL and the government entered in April 2000 was for 40 blocks in about four lakh sq. km.
It said the contract to supply gas between RIL and RNRL and also NTPC constituted less than one per cent of the gas exploration area available to RIL.
It said the cost of production of gas per million British thermal unit (mBtu) worked out to $1.28 and by selling gas to RNRL at $2.34, RIL would be making tremendous profit. “It is hard to understand that when the cost of RIL is only $1.28, the government is permitting it to sell gas not merely at $2.34, but at $4.2. These sensitive industries must be supplied gas at reasonable rate and this is in public interest.”
Senior counsel Harish Salve continuing his arguments before a Bench of Chief Justice K. G. Balakrishnan, Justice B. Sudershan Reddy and Justice P. Sathasivam said that under the PSC, gas was the government’s property and it being a contractor “does not have rights to utilise the gas which could be sold only at a price approved by the authorities.”
He made it clear that RIL could not supply gas to RNRL at lower price than the government-approved rate as it would incur huge cash losses if it was forced to do so. He said if it was forced to meet the commitment made in 2005, it would commit breach of PSC and violate the government’s policies, which would lead to termination of its project.
Mr. Salve said “It is RIL’s case that there is no problem to supply as stipulated in the agreement except for the rider that it is subject to Government approval. With the Gas Utilisation Policy (GUP), the quantity of gas should be allocated by the Government at the Government-approved price. With regard to the tenure, the gas can be supplied only as long as gas is available in the field. Hence a fixed tenure of 17 years is not possible since the development plan envisages the gas field to last for about 12 years.”