| Accusing the Mukesh Ambani-owned Reliance Industries Ltd of "artificially inflating" the price, the party urged the Centre to decide the price on the basis of production costs and "reasonable profit". |
| Coming down heavily on Reliance Industries for "changing" the price from $2.34 per million British thermal unit (mBtu) in 2004 to $4.33 per mBtu, the CPI(M) said this was designed to "ensure windfall profits for the private contractor for exploiting the natural resources of the country." |
| The Politburo said the latest price was inconsistent with the earlier price of $2.34 per mBtu for supplies to NTPC through a competitive bidding process. "Even if the price quoted in 2004 is indexed to the present, it can no way allow for an 85 per cent hike, as RIL has done. The price proposition is an artificially inflated one and should be rejected." |
| Although the prime minister has constituted an empowered group of ministers (eGOM) headed by External Affairs Minister Pranab Mukherjee to tackle the issue, there are sharp differences in the government. |
| The petroleum ministry has shown a soft corner for RIL so far, maintaining that the price should be market-driven, as provided for in the production sharing contract. |
| It says going back on the contract will lead to a long litigation process for the government and artificially depressing prices will deter overseas oil companies from bidding for exploration blocks in the future. |
| On the other hand, power and fertiliser ministries have argued that gas prices need to be regulated to keep electricity and fertiliser prices low. |
| They say input costs shouldn't be market-determined when the cost of the products "" electricity and fertilisers ""are controlled by the government. |
| Echoing this concern, the Politburo said, "Allowing the private contractor to fix the gas price at such a high level will severely affect the viability of industries like power and fertilisers who want to switch over to gas." |
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