Keep equidistance in Ambanis’ spat, Mulayam tells PM

Samajwadi Party, the UPA Government’s largest ally, has taken its gloves off in support of Anil Ambani with the party...

Samajwadi Party, the UPA Government’s largest ally, has taken its gloves off in support of Anil Ambani with the party supremo asking Prime Minister Manmohan Singh to ensure that his Government maintain equidistance in the Ambani brothers spat over sharing of natural gas from the Dhirubhai field.

“I strongly believe that the intent of the Government should only be to ensure that its rights under the production sharing contract (PSC) are protected and does not prejudice in any manner the pending court matter to aid any specific party,” Mulayam Singh Yadav wrote to the PM just days before the crucial trust vote.

The Petroleum Ministry has impleaded in the court case between Anil’s Reliance Natural Resources Ltd (RNRL) and elder brother Mukesh’s Reliance Industries Ltd (RIL) on grounds that gas is a national resource and it cannot get locked in family disputes. Yadav has prescribed strict do’s and don’ts for the ministry to remain involved in the case.

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“To elucidate its intent, the Ministry of Petroleum & Natural Gas should clarify that:

• The price approval requirement under PSC is only for the purposes of calculating Government’s share in profit petroleum

• The Government’s interest is limited to its profit share and the valuation thereof

• The Government has no concern about the RIL’s share of gas and how it is sold without affecting its profit share

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• The purpose of Government’s intervention at this juncture is limited to expedite the process of court proceedings.”

Yadav’s July-18 letter was forwarded by the PMO on July 29, a week after UPA won the trust vote in Parliament backed by the SP. “It is requested that the facts of the case may kindly be sent to this office,” wrote the PMO while attaching a copy of the letter.

Earlier last month, SP general secretary Amar Singh wrote to the PM suggesting steps to tackle inflation. He did not name RIL, but suggested a windfall tax on oil companies including ‘a well-known private operator’ as well as removing the export oriented unit status of a domestic refinery (read Jamnagar refinery of RIL).

Anil says he wants the gas for the Dadri power project in Uttar Pradesh, the very reason cited by Yadav for seeking an explanation. “As I am concerned about securing gas supply for Dadri project from RIL’s Krishna-Godavari basin, which was envisaged by Samajwadi Party in 2004, the above clarification will help clear the ambiguity on Government’s tilt towards any party,” wrote Yadav.

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Anil has claimed right over 28 million standard cubic metres of gas per day at $2.34 per million British thermal units, the price inked in the contracts between the two, while the Government fixed price is $4.2 per mBtu. Unless this squabble is not cleared, RIL has been stopped from entering into any sales agreement with buyers.