Mumbai: The gas dispute between the estranged Ambani brothers moved to a new stage on Monday—Parliament.
Accusations still flew thick and fast in the Lok Sabha and at an afternoon media conference call by Anil Ambani, but there were some early signs that the government and the younger Ambani had softened their stances.
Playing safe: Minister for petroleum and natural gas Murli Deora. Pankaj Nangia / Bloomberg
Union minister for petroleum and natural gas Murli Deora said in the Lok Sabha that the government has nothing to do with a “private dispute between two industries or industrialists” and would do its best to protect government and public interest in gas distribution policy.
This is in contrast to a petition filed earlier in the courts that a private memorandum of understanding between the two Ambanis that is the epicentre of the gas dispute should be scrapped.
On his part, Anil Ambani said he “welcomed” the ministry’s stance to consider allocating gas to a proposed power plant at Dadri in Uttar Pradesh that is being set up by one of the companies he controls, even as he fired fresh salvos aimed at Reliance Industries Ltd (RIL), run by his elder brother Mukesh Ambani. Last week, he had launched a bare-knuckled attack on Deora at the annual shareholders meeting of Reliance Natural Resources Ltd (RNRL), openly accusing the minister of favouring RIL.
RNRL is to buy the gas and sell it to the Dadri power plant.
Anil Ambani asked for “an objective and independent probe” by government agencies into the Rs45,000 crore capital expenditure programme that RIL has drawn up and got approved for developing the gas-rich D6 block of Krishna-Godavari basin, off the eastern coast of India. Such “gold plating” of capital costs, if indeed a reality, could benefit RIL in its revenue sharing deal with the Indian government, which owns the gas field.
The younger Ambani also called upon state agencies such as the Central Vigilance Commission and the Comptroller and Auditor General to look into “exorbitant” transportation rates being charged by Reliance Gas Transportation Infrastructure Ltd, a private firm owned by Mukesh Ambani, raising the price of gas further “when global gas prices have declined by as much as 80%”.
There were no official reaction from RIL.
These developments pertain to a three-year-old gas dispute between RIL and RNRL in which the latter is claiming rights to 28 million standard cu. m of gas a day (mscmd) for 17 years at $2.34 per million British thermal unit (mBtu), quoting a 2005 family pact that formed the basis of splitting the Reliance businesses. This is 44% cheaper than the government-mandated price of $4.2 per mBtu. RIL is contesting this claim saying it cannot give the gas to anyone at any price without government approval—a stance seconded by the petroleum ministry. The Supreme Court will hear the case on 1 September.