Parliament’s Standing Committee on Finance has ordered a comprehensive study into allegations that Reliance Industries Limited may have deliberately scaled back production of gas from fields in the Krishna-Godavari basin, a highly-placed source in the body has told The Hindu . The Finance Ministry has been given time till November 24 to estimate losses to the exchequer caused by Reliance’s under-production.

A first of its kind ever initiated by a parliamentary standing committee, the study was ordered on November 9, based on a note submitted by Communist Party of India MP Gurudas Dasgupta. The note demands that the Finance Ministry issue a note to Reliance demanding payment of $1.7 billion to compensate for costs that will be imposed on the exchequer in 2012-2013 because of the shortfall in production. Mr. Dasgupta’s note estimates that replacing cheap domestic gas from the Krishna-Godavari fields with imported gas will cost some Rs. 43,000 crore in 2012-2013, and another Rs. 48,000 crore in 2013-2014. The Committee’s action comes less than a fortnight after anti-corruption campaigner Arvind Kejriwal accused Reliance of blackmailing the government into raising natural gas prices by scaling back production in the Krishna-Godavari fields.

RIL has denied the allegations, saying the shortfall in production has been caused by technical issues, including sand and water ingress into two wells.Last month, the government approved a plan intended to address these issues.

The company did not, however, respond to The Hindu ’s request for comment on the Standing Committee-directed study.


  • Study ordered on the basis of Dasgupta’s note

  • Shortfall in output caused by technical issues: Reliance