SC fixes next hearing in RIL gas case on March 24

Govt has notified new pricing formula which will lead to doubling of all gas produced in country to $8.4 from April 1

The Supreme Court on Wednesday saw drama with Colin Gonsalves appearing for Communist Party of India (CPI)'s Gurudas Dasgupta, pleading Reliance Industries Limited (RIL)'s Krishna-Godavari (K-G) D6 block be put on auction.

The court was hearing a public interest suit jointly filed by Dasgupta and Common Cause, challenging the gas price rise expected to come into force from April. The next hearing would be on March 24, after Holi.

Gonsalves argued just as some of the blocks in the K-G basin had got relinquished and were put on auction for the coming round of New Exploration Licensing Policy, the producing D1 and D3 wells should also be put on the block. "This should be put on auction so someone can prove if there is enough gas."

Responding to an argument by Prashant Bhushan, appearing for Common Cause, that government revenue was taking a hit, the bench said it was because of the structure of the contract. "If someone is spending on a project like this, he is not doing charity."

On the charge of gold-plating of costs, RIL said, "Under the cost-recovery and production-sharing mechanism employed in the production sharing contract, the contractor derives absolutely no benefit from spending more by way of contract costs than is necessary to carry out exploration and development operations. It is the contractor who bears the risk. Petroleum may not be produced in sufficient quantities for it to recover costs associated with exploration and development of the block. But the government stands to receive a share of profit petroleum from the day that production starts."