The Union government was contemplating action against Reliance Industries Limited (RIL) for not keeping its promise of producing 70 MMSCMD of gas (million metric standard cubic meters a day) from its D6 block in the Krishna-Godavari Basin, Minister for Petroleum and Natural Gas S. Jaipal Reddy indicated here on Sunday.

Mr. Reddy, who visited on-shore and off-shore areas in the KG Basin in the last two days, said RIL had produced only 37 MMSCMD and next year the output was likely to come down to around 27 MMSCMD. “Both technical and legal aspects are involved in this matter. Therefore, we are consulting the Law Ministry. Commitments have to be respected in the oil sector,” he said.

The Minister declined comment on RIL's demand of increasing prices. He, however, clarified that as far as natural resources were concerned, the government was the final authority and it would respect the production-sharing agreement.

On the gas pricing policy, he said the Empowered Group of Ministers would meet on February 24 to take a decision on the pricing policy and the RIL issue. As there was uncertainty over gas production, the country was importing 80 per cent of its requirement by investing $ 80 billion.

He asked Oil and Natural Gas Corporation Limited to be more dynamic in its activity.

An increase in petrol prices in the next few weeks could not be ruled out, he said at a press conference.