Millennium Post

SC gives RIL 4 weeks to reply on KG Basin gas exploration row

The apex court posted the matter for hearing on May 5 when it would decide the time likely to be given to each party in the matter to put forward their arguments. On January 6, the court had asked all the parties to complete their replies within six weeks. A bench comprising justices TS Thakur, J Chelameswar and Kurian Joseph would examine the RIL’s response to the CAG report that had sought disallowance of $357.16 million (about Rs 2,179 crore) expenditure RIL had incurred on drilling of wells and payments to contractors in KG-D6.

The order was passed during a brief hearing of petitions filed in 2013 by senior CPI leader Gurudas Dasgupta and NGO Common Cause, challenging the erstwhile UPA government’s decision to double the price of natural gas from $4.2 to $8.4 per mmbtu and seeking cancellation of RIL’s contract for exploration of oil and gas from the KG basin. Senior advocate Harish Salve, appearing for RIL, sought additional three to four weeks to respond to the CAG report.

Solicitor General Ranjit Kumar said the Centre can make comments on the Comptroller and Auditor General (CAG) recommendations and findings only after getting the report of Parliament’s Public Account Committee which was examining it. The third PIL on the issue has been filed by advocate M L Sharma. Earlier, the court had allowed Dasgupta and other petitioners to file their responses to the NDA government’s fresh guidelines which would “supersede” the UPA regime’s policy on price fixation for natural gas, including that from KG basin, which has been the bone of contention between the Centre and RIL.

On November 14 last, the Solicitor General had said before the bench that the ‘new domestic natural gas policy’ has been approved by the NDA government on October 18, raising natural gas price to $5.61 per mmbtu from November 1. He had also said that the recommendations of the Rangarajan Committee “would not be given effect”.

The Rangarajan formula on gas pricing was approved by the UPA government. Rangarajan was Chairman, Economic Advisory Council, to the then Prime Minister. In its second audit of RIL’s eastern offshore KG-D6 block, the CAG on November 28 had recommended disallowing the company from recovering $279.8 million in cost of three wells as well as a part of expenditure the firm had incurred in the area which was improperly declared discovery area.
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