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Monday, July 29, 2013

SC notice to Centre, RIL on gas price hike

New Delhi: The Supreme Court on Monday sought responses from the Centre, Reliance Industries Ltd and petroleum minister M Veerappa Moily on a PIL alleging a "conspiracy" behind the government's recent decision to increase price of natural gas from $4.2 to $8.4 per unit from April 2014. 

    Before issuing notices and seeking replies from respondents within four weeks, a bench of Chief Justice P Sathasivam and Justices Ranjana P Desai and Ranjan Gogoi sought clarifications from petitioner's counsel Colin Gonsalves and heard RIL counsel Harish Salve. 
    To Salve's preliminary objections, the bench said, "We cannot brush aside the assertions of an MP at the preliminary stage. You (respondents) file your replies and we will consider it." It fixed the hearing on the PIL for September 5.
Petitioners seek quashing of KG gas price hike 
New Delhi: The Supreme Court has refused to brush aside the allegations of a "conspiracy" to illegally hike KG Basin gas prices from next year. Petitioners, MP Gurudas Dasgupta and former power secretary E A S Sarma, said, "Mandate of this government ends prior to April 2014 when a new one will be in place pursuant to the national elections and that it is utterly unreasonable to burden a new government with subsidy." 
    The petitioners alleged that KG basin gas exploring contractors, RIL and NIKO Resources, entered into a conspiracy with the Centre "to provide exorbitant, unreasonable and excessive profits to the contractors, which will bankrupt the exchequer and severely affect the Indian economy". 
    They sought quashing of the gas price hike and requested the court to direct the government to ensure that henceforth "the price of domestically produced gas is fixed in rupees and not dollars or any other currency". "Appoint a court commission comprising independent and fearless officers and experts having expertise in the area of this dispute to inquire into the real cost of gas at the wellhead in the KG basin and also into the capacity of the basin itself and related issues raised in the petition," they said. 
    Dasgupta and Sarma also alleged that certain benefits were being granted to the contractors by government for mala fide and collateral gain which would in
crease the subsidy burden enormously. 
    They also said the gas price hike would "enormously impact" food and energy security resulting in higher prices of fertilizers, food products and cooking gas affecting the poor. 
    Quoting Comptroller and Auditor General's report, they sought a direction to RIL and NIKO to "forthwith relinquish those areas of KG basin as recommended by the CAG and delineated by the Director General of Hydrocarbon". Salve said RIL was ready to relinquish these and had already written to the government in this regard. 
    The petitioners quoted DGH to allege that only 18 wells against the required 50 had been drilled by RIL, which incurred expenditure of $5,693 million but till March 31, 2011 had recovered $5,258 million. 
    The petitioners said the petroleum ministry on May 2, 2012 issued a notice to RIL informing it that breach of production sharing contract and failure to comply with the approved plan had resulted in heavy loss of production and sought to disallow $1005 million from cumulative cost incurred by the contractor. 
    They said the matter went to arbitration with RIL appointing Justice S P Bharucha as its arbitrator and government choosing Justice V N Khare. When they were in the process of appointing the third arbitrator, the petroleum minister gave an interview saying he intended to junk arbitration and push for a negotiated settlement.

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