India government owned Gail may get exclusive marketing rights for the distribution of the natural gas produced by Reliance Industries from its D-6 block in the Krishna-Godavari basin. The government may request the Bombay High Court to appoint Gail as the nominee for distributing the gas to fuel starved fertilizer and power units.
An official close to the development, who requested anonymity said that if the court allows, Gail would be asked to sell the gas as per the government approved utilization policy and pricing that is USD 4.20 per million British thermal unit at the land fall. The land fall point for KG gas is at Kakinada. The court said that it could modify the injunction that prevents RIL from selling gas to third parties other than Reliance Natural Resources.
He said that “The gas is a national asset. No individual or company can hold the country to ransom, especially at a time when many fertilizer and power plants are on the verge of closure due to fuel shortage. The India government said that the gas price of USD 4.20 per million British thermal unit at Kakinada will be uniformly applicable to all users. In addition, buyers will have to pay the transmission cost and local taxes.”
The India government hopes that as an interim measure, the court may vacate the injunction that prohibits RIL from selling the gas. He said that “RIL is expected to start gas production from this month and some members in the empowered group of ministers feel the dispute between the contractor and disputed buyers shouldn’t stop production and use of the national asset.”
Another official, who didn’t wish to be identified, said that the India government had held a meeting in this regard with Gail and RIL officials one and a half months ago. He said that “RIL had expressed its reservation on the proposal as this would reduce the company as a mere service provider. However, it had admitted that the government had sovereign rights over the asset.”
Source ET
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