Govt gets HC nod for fixing RIL gas price

The Bombay High Court today said the government could go ahead with finalising the price of Reliance Industries' (RIL) gas from the D6 block in the Krishna-Godavari basin.

The Mukesh Ambani-promoted RIL had appealed to the high court against an interim order on June 20 restricting the company from selling its entire 80 million cubic metres per day (mcmd) of gas from the K-G basin to any company other than Anil Ambani's Reliance Natural Resources Ltd (RNRL) and NTPC for eight years.

The court will hear the case again after eight weeks. A division bench of Justices J N Patel and Ahmed Sayed said the government can go ahead with the process of fixing the price of the gas as per the contract for the field, without any prejudice to either RIL or RNRL.

The government has indicated that it has no issues with the pricing formula submitted by RIL.

Last week, Petroleum Minister Murli Deora had said that RIL's gas pricing formula is likely to be cleared within a month.

RIL is scheduled to start producing gas from the K-G basin in June 2008. Production will start at an initial rate of around 26 mcmd, which will be scaled up to a peak of 80 mcmd by 2010. RIL has, however, told the petroleum ministry it can start producing at the peak rate within six months of the start of production as the demand for gas in the country continues to be double that of supply.

The main plea before the high court, that of RNRL asking the court to direct RIL to supply 28 mcmd of gas for its 7,000 mw power plant at Dadri, will be heard tomorrow.

RIL has, however, told the petroleum ministry it can start producing at the peak rate within six months of the start of production as the demand of gas in the country continues to be double that of availability.

The main application before the high court, that of RNRL asking the court to direct RIL to supply 28 mcmd of gas for its 7,000 Mw power plant at Dadri, will be heard tomorrow.