New Delhi: The government on Wednesday said the proposed gas sales by Mukesh Ambani's Reliance Industries Limited to Reliance Natural Resources Limited (RNRL), the Anil Ambani Group, did not meet the contract norms. It stressed that there was "no delay" on its part in taking a decision.

Making a statement in the Lok Sabha after Samajwadi Party members alleged delay in approval of gas sales prices, Petroleum Minister Murli Deora said his ministry received the proposal from RIL on April 14 this year and conveyed its decision on July 26. "Therefore it would be incorrect to say that the government took almost a year to convey its decision on the proposal," he said.

Mr. Deora pointed out that the transaction between RIL and RNRL was part of their demerger agreement and did not meet the Production Sharing Contract (PSC) criteria of "arms-length sales." The statement, read out by Minister of State for Chemicals and Fertilizers B. K. Handique noted that the proposal was examined in accordance with contract provisions. "The provisions of the PSC provide for valuation of natural gas on the basis of competitive arms-length sales and enjoin upon the contractor to sell all natural gas to the benefit of the parties to the contract," it was pointed out.

Members troop into well

The members, however, were not satisfied with the statement and stormed into the well, raising slogans against the United Progressive Alliance Government. Parliamentary Affairs Minister P. R. Dasmunsi, however, pacified them with the assurance that the government was open for a short duration discussion on the matter.

Mr. Deora explained in the statement that the government was party to the contract as a significant share of the surplus generated under the PSC flowed to it in the form of profit petroleum and royalty. "These have direct relation to the gas price adopted for valuation under the contract. Therefore, for the purpose of the contract, the government is required to approve the gas price formula for valuation of cost petroleum, profit petroleum and royalty," he said.

The time taken by the government to convey its decision on the gas price formula approval had no bearing on the likely production date of the fields.

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