Now that the baton has been passed from the committee of secretaries to an empowered group of ministers to resolve the controversy over RIL’s KG Basin gas, we hope for a final decision soon. Especially since any confusion that questions the sanctity of a contract sends the wrong signals to the investing community.
Curiously, 15% of our domestic gas has already been priced through market bidding. The sheer volumes involved in the case of RIL gas seem to have hindered clarity on part of a government facing multiple political influences. With the onus of interpreting the RIL contract now shifting from bureaucrats to the ministerial court, it is important there is no further politicization.
At the same time, the concern is whether the government has the required technical rigour to reach a considered view on the issues. In other words, since the main controversy is on pricing, where is the domain expertise to understand the gas market implications?