Online BusinessRIL pushing for higher gas price to inflate profit: RNRL
Anil Ambani-led RNRL has accused Mukesh Ambani’s RIL of trying to inflate its profits by pushing for $4.20 as per-unit sale price of gas from the KG Basin.
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“In case the government values the gas at $4.20 per mmBtu and RIL sells gas to RNRL at $2.34 per mmBtu, the government will still obtain its full share of the profits on the gas,” argued RNRL today before the Supreme Court. An affidavit filed by RNRL before the apex court further claimed that it had an “unqualified” right to get gas at $2.34 per unit for 17 years from RIL, which would not suffer any losses as claimed by it. “RIL will make a profit of Rs 30,000 crore,” said RNRL.
It also claimed “an unqualified right to get 28 mmscmd for 17 years at $2.34 mmBtu.” Countering an RIL argument that it was bound by the price fixed by the government for selling gas from the KG basin, RNRL further said the empowered group of ministers had not decided the price of gas to be sold by RIL and had left the issue open.
RNRL counsel Mukul Rohatgi, resuming his arguments from last week before a bench headed by Chief Justice K G Balakrishnan, said the minutes of the meeting of ministers clarified the state-owned NTPC and the two companies owned by the warring Ambani brothers were fighting suits in the Bombay High Court. Since the case was pending in the court, the government did not take any decision. The counsel said in view of this stand, there was ample freedom to follow the price promised in the MoU signed six years before the government decision.
The decision to fix any price would be binding on only new industrial units and not on those that had signed agreements much earlier.
While RNRL is seeking gas at a committed price of $2.34 per unit, RIL says it cannot not honour the commitment made in the 2005 family agreement due to the government"s pricing and gas policy.
Both brothers are, therefore, before the Supreme Court in appeals against the Bombay High Court judgment, which affected their interests in parts. The government, too, joined in the litigation.
The arguments of RNRL are expected to conclude on Wednesday, when RIL will begin its reply. The hearing would spill over to the next week when the Supreme Court is scheduled to go into yearend recess.
The government, which had already completed its arguments, stressed that all natural resources in the country belonged to it and private arrangements within a family could not override public interest.