Hike price before you quit: Reliance Industries Limited to Government

New Delhi: Reliance Industries has asked oil ministry to announce a new natural gas price immediately after polling ends on May 12, saying this was necessary to avoid irreparable loss to all parties, including the government.

While a new formula for pricing of all domestically produced natural gas was notified on January 10 and published in Gazettee on January 17, the Election Commission last month asked the government to defer its implementation till general elections are completed.

The new pricing formula, that almost doubles the price of natural gas to about $8.34 per million British thermal unit, was to be implemented from April 1 but following the directive of the poll watchdog, was put in abeyance till model code of conduct for elections is in place.

“... the new price as per the guidelines must immediately be intimated once the model code of conduct is not in force i.e. on May 13, 2014 which is after the last day of polling on May 12, 2014,” RIL president and COO B. Ganguly wrote to the oil secretary.  

RIL said the $4.205 per mmBtu price for gas from its eastern offshore KG-D6 field was valid for the first five years of production, which ended on March 31. But since EC deferred implementation of the new pricing, the firm continues to sell gas at old rate on “provisional basis,” Mr Ganguly wrote. 

He said immediate intimation of the new rate after poll code ends on May 12 was “necessary to avoid extended dispute and irreparable loss to all parties to the Production Sharing Contract (PSC).”