The dispute between Mukesh and Anil Ambani over the supply and price of natural gas from the D6 field in the Krishna Godavari (K-G) basin forced the Lok Sabha to adjourn at least once with Petroleum Minister Murli Deora asserting that the government did not have anything do with "the private dispute of two industries or industrialists" but was trying to protect the interests of the government and public.
Deora’s statement was in response to last week’s uproar in Parliament over the price at which natural gas will be supplied from the K-G basin, operated by Mukesh Ambani-controlled Reliance Industries Ltd, to Anil Ambani’s Dadri power plant in Uttar Pradesh, an issue that is pending before the Supreme Court.
The minister’s statement referred to the production sharing contract (PSC) signed in 2000 between the government and Reliance Industries Ltd (RIL) for production from D-6 which stipulates that the gas is to be utilised in accordance with the government’s gas utilisation policy.
“This is our constitutional and legal obligation. We will make all endeavours to protect the government’s legal rights to regulate the utilisation of gas and its allocation,” Deora said in his statement.
The Anil Ambani group wants gas to be supplied on a priority basis at $2.3 a unit for 17 years under a 2005 family agreement whereas RIL wants to supply it at a government-mandated price of $4.2 a unit. Anil Ambani publicly accused the government of bias towards RIL at an RNRL AGM last Tuesday.
In Parliament, Deora specifically mentioned RNRL’s Dadri plant, saying an empowered group of ministers (EGoM) considered the case but “this plant is neither installed nor functional”.
The EGoM decided that subject to the availability of gas, allocations from RIL’s KG D-6 fields will be made to projects in the pipeline, including Dadri, as and when they are ready to start production. “We will allocate gas to the Dadri plant subject to availability and the plant will be treated on the same footing as other similar plants placed under similar circumstances,” Deora said.
The Lok Sabha, however, was forced to adjourn after the Samajwadi Party led by its leader Mulayam Singh Yadav, who is known to be close to Anil Ambani, protested against the Deora statement and demanded his resignation.
Yadav, who had raised the gas dispute issue last week as well, said the minister had ensured that "one industrialist and his industry house enjoy a Rs 50,000-crore benefit".
“All the wealth of this nation is being given away to one industrialist,” Mulayam added, but maintained that he didn’t want to get involved in dispute between the two brothers. “I have no business in the fight between the two brothers. I fear NTPC will suffer massive losses. The government will be responsible for these losses,” Yadav said.
Yadav, whose party is supporting the UPA government from outside, pegged his arguments on the power crisis in Uttar Pradesh and demanded the government must ensure supply of gas to Anil Ambani’s Dadri power plant.
Meanwhile, Deora defended the government’s decision to file a special leave petition in the Supreme Court against a Bombay High Court order of June 15 upholding the Ambani family agreement.
He said the high court’s decision had implications for the government’s rights to formulate and implement the gas utilisation policy under the production sharing contract.
Deora said out of the initial production, 15 million standard cubic metre a day (mscmd) gas will go to existing urea plants, 18 mscmd to existing power plants, 3 mscmd to existing LPG plants and 5 mscmd for city gas distribution projects.
Of the 18 mscmd for power plants, 2.67 mscmd gas has been allocated to NTPC plants and another 2.7 mscmd has been allocated to Ratnagiri Gas and Power Pvt Ltd (which operates the Dabhol power plant) in which NTPC has 28 per cent stake.
The EGoM, he added, had also decided that, if any gas remains unutilised against this allocation, it will be allocated to operational gas-based steel and power plants, including captive power plants. “No gas has been allocated to any plant that is not existing or functional…Gas is a scarce commodity and we would like to give gas to as many plants as possible. But, obviously, the first priority will be to supply gas to existing plants, which are not operating at all or are operating sub-optimally because of non-availability of gas.” He noted there was no discrimination against Uttar Pradesh with NTPC plant at Dadri has been allocated 0.45 mscmd of gas as it is covered under the criteria evolved by the EGoM. Out of a total of 15 existing gas-based urea plants in the whole country, Aonla, Phulpur, Shahjahanpur, Babrala and Jagdishpur in Uttar Pradesh have been given gas.
Also read: july 31: Apex court declines RNRL’s plea for Sept 1 settlement
