Gangavaram (Vizag): Andhra Pradesh chief minister Y S Rajasekhara Reddy on Sunday said that the settlement of the gas dispute between the Ambani brothers could not be left to their mother Kokilaben and the Centre must play a decisive role, for which he has written to the Prime Minister.
“The dispute over sharing of gas is not an issue to be settled by (the) mother (Kokilaben). It is for the government to decide who should get the gas and also at what price,” Reddy said on the sidelines of a function here.
In its judgement, the Bombay high court had directed the group companies of Mukesh Ambani and his younger brother Anil to work out a commercial agreement based on their memorandum of understanding and suggested that the two could also approach their mother Kokilaben for help.
In his letter, Reddy has asked Prime Minister Manmohan Singh to defend the Centre’s right to allocate national resources fearing that a legal dispute between Anil Ambani-led Reliance Natural Resources Ltd (RNRL) and Mukesh Ambani-run Reliance Industries Ltd (RIL) could hurt consumers.
The Andhra Pradesh chief minister’s plea comes amid petitions filed by the two firms in the Supreme Court against the Bombay high court ruling on gas supply.
“We are apprehending that the litigation between RIL and RNRL might take away the powers of the EGoM (empowered group of ministers), unless it is properly defended in the Hon’ble Supreme Court,” he said.
“All gas supply contracts, be it the family contract or the GSPA (gas sales and purchase agreement) with the power plants, should become subordinate to the decisions of the EGoM and not otherwise,“ Reddy said in the letter to Singh dated 4 July.
Since it (gas from the KG basin) is a public property, it is for the government to take a decision, Reddy said.
“We cannot allow the decision-making in regard to such an important resource to fall in the private monopolistic domain,” the chief minister’s letter said.
The government was made intervener in the case by RIL.
Meanwhile, in Mumbai petroleum minister Murli Deora today said that the KG basin gas belongs to the government and not to either of the Ambani brothers, Mukesh and Anil, adding that he would not like to say much on the dispute as the matter is to be heard in court.
An EGoM gave priority to fertiliser firms in allocating gas, followed by power plants, and fixed the price of gas from RIL’s KG basin fields at $4.2 per mBtu -- 44% higher than what the Mukesh-run company had quoted in its NTPC tender.
According to the June 2005 family settlement, which split the Reliance business empire between Mukesh and Anil, RIL was to supply gas to Anil Ambani group firm RNRL at $2.34 per mBtu. A dispute arose after the government fixed a new base price.
“It is only fair that the EGoM should have first honoured all the existing commitments before proceeding with new allocations or allocations to projects which were promoted on the basis of firm allocations from other gas fields...”
“We have also requested that we should get at least 10% of the gas allocation on a preferential basis for industrial development in our state,” Reddy’s letter said.