Govt-determined gas price needs to be examined: SC

THE Supreme Court, while hearing the gas dispute between Ambani brothers on the sixth day, said the basis for fixing the government-determined natural gas price of $4.20 per unit required examination. The three-judge bench observed the sale of gas at $2.34 per unit may not only end the dispute between Ambani brothers, but may also be in the public interest.      The two brothers are fighting a legal battle over supply of gas from Mukesh Ambani-promoted Reliance Industries' (RIL) D-6 block in the Krishna-Godavari (KG) basin to Anil Ambani's Reliance Natural Resources (RNRL).      "If the price (of the gas produced from RIL's KG-D6) will be at $2.34 (per unit), then it will not only end the dispute between two companies (RIL and RNRL), but also be in (the) public interest. The fertiliser and power companies will be getting gas at cheaper rate. Ultimately, the people will be benefited," said a bench comprising Chief Justice KG Balakrishan, Justice RV Raveendran and Justice P Sathasivam.      Justice Raveendran, speaking for the bench, said raising (gas price) from $2.34 to $4.20 per unit would make "only you (RIL) the beneficiary and not the public. RIL is gaining and not the public. Is it in public interest?"      RIL counsel Harish Salve said the $4.20 per unit price benefited the government, as this would make cost recovery quicker, and the government would receive a higher share for longer period.      The court, however, said the basis for fixation of price for sale of KG gas at $4.20 per unit also required consideration. "Whether fixation of price at $4.20 (per unit) was done arbitrarily. Whether it has some statutory basis or contractual obligation. These are the issues, which has to be decided," said Justice Raveendran.      "Isn't it the case that the price of $4.20 per unit will benefit RIL?" asked the court. Mr Salve replied that the pricing was approved by an EGoM and the contractor (RIL) has to supply KG-D6 gas at $4.2 per unit.      Chief Justice Balakrishnan intervened at that point and said the $4.20 per unit price may make RIL recover its cost quickly and make profit in a shorter period. RNRL's counsel Ram Jethmalani, however, said he would prove that RIL would make profit by selling gas at $2.34 per unit.      sanjay.singh6@timesgroup.com