Gas price: RIL deal provides no govt role, says RNRL

Anil Ambani group firm Reliance Natural Resources Limited told the Supreme Court on Wednesday that the government has no role to play either in the utilisation or the fixation of gas price as per its contract with Mukesh-led Reliance Industries Limited.

"RIL has complete marketing freedom for sale of gas within India. The marketing freedom would include within its scope the freedom to sell the gas on such terms and at such price that RIL deems fit and proper," RNRL said in an affidavit while replying to the petition filed by RIL.

Stating that Reliance Industries Ltd has been changing its stance with regard to the memorandum of understanding (family agreement), Reliance Natural Resources Limited detailed RIL's response on different occasions and said 'this fully exposes RIL's blatant lie and falsehood.'

The two sides had approached Supreme Court challenging a decision by the Bombay high court on June 15, which said RIL should provide 28 million cubic metres of gas per day to RNRL at $2.34 per mmBtu and both the parties should sign a necessary agreement for the same within a month.

RIL, however, is pleading that it was only a contractor for the gas from the Krishna-Godavari basin's D6 block and did not have the power to fix the price, while the government has also moved a special leave petition in the case asserting its right on pricing and distribution of natural gas.

The apex court has decided to commence hearing on this matter on October 20.

Stating that the supply of gas was not subject to any gas utilisation policy of the government under the PSC with RIL, RNRL said in its affidavit that 'the petitioners (RIL) are seeking to mis-interpret the terms of the Production Sharing Contract to suggest that any sale of gas has to be in accordance with the gas utilisation policy.'

RNRL further said that RIL had made a 'valid, binding and enforceable commitment in the year 2005 to supply gas on the agreed terms to RNRL' and the said commitment and obligation was not affected in any manner by the gas utilisation policy announced by the government in 2008.

The Anil Ambani group company also said that it had never questioned the government's ownership over natural resources, but noted that the government being owner of the gas fields was also bound by the terms of the PSC, under which the ownership of gas produced was shared with the contractor RIL.

In terms of PSC, RIL has complete market freedom to deal with the gas that belongs to it and the "Company Court and the Division bench had given directions only with regard to the gas that belongs to RIL and has not given any direction in relation to the gas that belongs to the Union of India," RNRL said.

RNRL further submitted that the Bombay high court order had not disregarded the PSC between RIL and the government of India.

Image: Anil Ambani