Supreme Court gives Minister 6 weeks to respond to PIL against doubling gas price

The Supreme Court on Friday granted the Centre and the Petroleum Minister Veerappa Moily six weeks to file their response to a public interest litigation petition against the government decision to double, from April next, the price of the KG basin gas to $8.4 per million British thermal unit (mBtu).

After hearing Attorney-General G.E. Vahanvati, a Bench of Chief Justice P. Sathasivam and Justices Ranjana Desai and Ranjan Gogoi granted time also to the Petroleum Ministry, NIKO Resources Ltd. and BP Exploration (Alpha) Limited on the petition of senior CPI leader Gurudas Dasgupta and the former Power Secretary, E.A.S. Sarma.

Senior counsel Colin Gonsalves, who appeared for the petitioners, said a fresh application had been filed against arbitration proceedings. Mr. Vahanvati and senior counsel Harish Salve, who appeared for Reliance Industries Limited (RIL), said Mukesh Ambani’s company had filed the reply. Mr. Salve opposed the application.

The Bench said it would take up the application after six weeks.

In the new application, it was alleged that the Minister was determined to collude with RIL, NIKO and BP Exploration so as to make a mockery of the arbitration proceedings. The Minister had overruled not only the Petroleum Secretary but also the Director-General of Hydrocarbons and was pushing ahead to give the three respondents full support.

The applicants alleged that the government and the Minister were working out a strategy to use the arbitration proceedings as a pretext for taking the contentious and public issues away from court scrutiny. They wanted the entire records placed before the court, and the respondents and arbitrators restrained from going ahead with the proceedings.

In the main writ petition, the petitioners said the government had acted illegally and irrationally and with mala fide in granting the respondents excessive benefits, virtually bankrupting the exchequer and adversely affecting the economy as a whole. The contractors allegedly incurred an investment cost for the full capacity of 80 million metric standard cubic metres per day (MMSCMD) and recovered all of it and perhaps more from the government through the sale of gas priced at $4.2 per mBtu.

The petitioners sought a direction to RIL and NIKO to forthwith relinquish those areas of the KG basin as recommended by the Comptroller and Auditor-General; for appointment of a third arbitrator and completion of the arbitration process in six months; fixing the price of domestically produced gas in rupee and not in any other currency; and for staying the decision to increase the price of natural gas until after the disposal of the writ petition.

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