RIL pricing daylight robbery: RNRL

“The role of the government is only to undertake the valuation of the gas and not to determine the price. Price is to be determined as per the contract between RIL and RNRL,” he said before a Bench headed by Chief Justice K G Balakrishnan. “The mischief arose when RIL produced a complex formula for valuation and did not mention the price in dollars or rupees but a formula that came under attack from the high powered economic advisory committee,” the senior advocate said. “Fraud has been committed in giving approval to the complex pricing policy,” Jethmalani said before the Bench,also comprising Justices B Sudershan Reddy and P Sathasivam. “The complex formula was put by the RIL to artificially raise the price to $4.20 per unit (from $2.34) which is contrary to public interest. We need cheap gas for power and fertilizer plants,” he said.

The Ambani brothers are engaged in a high-voltage legal battle over the supply and price of the gas from KG basin. While RNRL is seeking gas at a committed price of $2.34 per unit,RIL says it cannot honour the commitment made in the family agreement due to government’s pricing and gas policy. RNRL said when the NTPC had invited global tender there were parties ready to supply gas at the rate of $3.18 per unit and now “how can can you fix the price at $4.20”.

“People who were prepared at $3.18 have been knocked out,” Jethmalani said adding that “the legal position is that you cannot create a policy on retrospective basis”. He said minutes of the Empowered Group of Ministers (EGoM) held on August 27 and September 12,2007 also only speaks about the valuation of the gas and left out the issue of contract between RIL and NTPC and RIL and RNRL. Jethmalani said the contracts were not discussed in the EGOM as it felt the matters were pending in the court.