Mumbai: The Union government on Monday made a strong case for lifting the stay on the sale of gas from the KG basin by Mukesh Ambani-run Reliance Industries Ltd (RIL) to benefit the power and fertilizer sectors.
“We told the Bombay high court that in the interest of the economy, and in view of the economic downturn, the stay should be lifted... It would benefit (the) power and fertilizer sectors,” additional solicitor general Mohan Parasaran said.
The government is seeking to vacate the stay, he said.
The high court, in May 2007, had stayed the sale of gas from the KG basin by RIL to third parties.
Step forward? A file photo of the Ambani brothers, Anil (left) and Mukesh. The Union government said on Monday that lifting the stay on sale of gas would benefit the power and fertilizer sectors.
The court on Monday was hearing the dispute between Mukesh Ambani’s RIL and younger brother Anil Ambani’s Reliance Natural Resources Ltd on the gas sale agreement.
The Union government has intervened in the dispute.
Parasaran also said that the government will be filing an affidavit on Tuesday, stating that the price of KG basin gas, determined by the empowered group of ministers (EGoM), will be applicable for all the buyers.
This statement is important as government-owned National Thermal Power Corp. Ltd (NTPC) too is involved in a legal dispute with RIL over the purchase of gas from the KG basin.
In the contract with NTPC—which RIL says is not yet formalized—the price is $2.34 per million British thermal unit.
But Parasaran told the court on Monday that according to an EGoM decision—which came after the deal with NTPC—the price of KG gas could not be less than $4.20 for all buyers.