Millennium Post

'What is your stand on gas price hike?' SC asks Govt

The Supreme Court on Thursday asked the NDA government to make its stand clear on fixation of the price for gas from Krishna-Godavri basin as to whether it sticks to the previous UPA dispensation's policy or making any departure from it.

'Tell us what is the situation. Whether you (government) are going to argue or stick to the old government's policy or is it something else?' a bench headed by Justice T S Thakur asked when the matter came up for hearing.

A fresh hearing on the issue started on Thursday as earlier a bench headed by Justice B S Chauhan was not able to adjudicate the dispute as he retired before the hearing concluded.

In the new bench headed by Justice Thakur, other two judges are justices J Chelameshwar and Kurian Joseph who were also in the bench headed by Justice Chauhan.

The PILs filed in 2013 by senior CPI MP Gurudas Dasgupta and the NGO, Common Cause, challenged the government decision to double the price of natural gas from $4.2 to $8.4 per mmbtu and seeking cancellation of Reliance Industries Ltd's contract for exploration of oil and gas from the KG basin. The new bench was told by Solicitor General Ranjit Kumar that NDA government has deferred implementing formula for gas pricing recommended by C Rangarajan Committee, till 30 September.

Rangarajan was Chairman, Economic Advisory Council to the then Prime Minister. Kumar informed the bench that the new government has formed a panel to recommend changes in gas pricing policy.

'A committee has already been formed. Till 30 September nothing is happening. The committee can submit its report by 30 September and only after that a decision will be taken,' the Solicitor General said while adding that the Centre will come out with its stand on the issue and file an affidavit.

The government also said that RIL has invoked arbitration on the issue of gas pricing. Dasgupta and the NGO said government should be asked not to make 'any further increase' in the price of gas produced by RIL from KG basin. 'For every one dollar increase in price of the gas there will be an extra cost of over Rs 10,000 crore on subsidy given to fertilizer companies,' advocate Prashant Bhushan, appearing for the Common Cause, said. The bench posted the next hearing on 14 November, saying 'Two things will have to be seen. One is whether they (NDA government) are going to change the policy or what stand they take. Second is the feasibility of this bench hearing this case for very long?'

The previous bench headed by Justice Chauhan had commenced the final hearing on the matter on 11 March but it remained undecided till 1 July this year when he retired.

RIL has refuted the allegation of extraneous consideration for the increase in the gas price from $4.2 to $8.4 per mmbtu for the gas taken from the existing fields like KG D-6 basin.

RIL had submitted that the gas output from KG basin has fallen to 8 mscmd against expected 80 mscmd due to 'technical reason'.

M Veerappa Moily, the then Union Minister of Petroleum and Natural Gas, was also named as one of the respondents in the petitions.

The PILs have also sought imposition of penalty on private parties for failure in adhering to commitments.

The petitioners have also sought a direction for a thorough audit by CAG of the working of the production-sharing contract (PSC) governing KG block, gold plating by RIL, underproduction by RIL and all related issues.
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