The Hindu : National : Anil charges RIL with creating artificial shortage

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Tuesday, Aug 04, 2009
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Anil charges RIL with creating artificial shortage

Sujay Mehdudia

Seeks independent probe into capital expenditure claimed by RIL for KG-D6

Demands immediate reduction in gas transport cost
“RIL has no justification to
keep the
production lower”

NEW DELHI: Reliance Natural Resources Limited (RNRL) chairman Anil Ambani on Monday charged Reliance Industries Limited (RIL), owned by his elder brother Mukesh Ambani, with “artificially” keeping gas production lower owing to lack of demand for the present “exorbitant” price of $4.20 at well-head, resulting in the astronomical delivered price of nearly $7 to customers.

In a strongly-worded reaction to Petroleum and Natural Gas Minister Murli Deora’s statement in the Lok Sabha, Mr. Anil Ambani demanded an independent probe by public accountability bodies such as the Comptroller and Accountant General (CAG) and the Central Vigilance Commission (CVC) into the “exorbitant” capital expenditure of Rs. 45,000 crore claimed by RIL for the KG-D6.

Mr. Anil Ambani also wanted an immediate reduction in the gas transport cost of nearly $1.25 being charged by RGTIL, a private company co-owned by RIL’s promoters.

He said: “Mr. Deora has confirmed that the production from the KG-D6 fields is at present just 31 mmscmd against even the initially rated capacity of 40 mmscmd, which was expected to go up to 80 mmscmd within a year. In June 2009, the Petroleum Ministry, based on certification by the Director-General of Hydrocarbons, conveyed that the maximum production potential from the KG-D6 by June/July 2009 was likely to touch 80 mmscmd. It is surprising that it should take yet another year for this production level to be achieved.”

The Ministry, he said, approved the entire capex of Rs. 45,000 crore for production of 80 mmscmd way back in 2006 on a 100 per cent cost recovery basis for RIL. Thus, RIL had no justification to keep the production lower, except for creating artificial shortage.

As for Mr. Deora’s statement that the Dadri plant was not yet operational, he said: “I would like to state that this situation has been caused solely by RIL’s mala fide conduct of consistently refusing to provide a bankable gas supply agreement to RNRL and NTPC, preventing implementation of these new projects.”

“We consumers request the Petroleum Ministry to take effective steps to prevent under-production or hoarding of a national resource by monopoly producers like RIL, in their narrow profit-driven motive, to artificially create shortages, with the sole objective of securing for themselves the highest possible gas prices, that too, in a backdrop where the global gas prices have collapsed by as much as 80 per cent.”

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