Govt for legal opinion on RIL demand for gas price hike

The petroleum and natural gas ministry has indicated that it will refer Reliance Industries' demand for an increase in price of the natural gas from its Krishna-Godavari D6 fields to the law ministry.

"We will take the opinion of the law ministry before proceeding on the issue," an oil ministry official said on Wednesday.    

RIL had on 6 January written to the ministry and the prime minister's office seeking a gas price revision, saying the current $4.2 per million British thermal unit rate for KG-D6 gas was "sub-market" compared with three times higher price being paid for imported liquefied natural gas.

The PMO subsequently asked the oil ministry to legally examine if the government can allow RIL to increase the price.     

The government also strongly rebutted the charge made by Mukesh Ambani's RIL that the government policy to keep domestic gas prices subdued (at $4.2 per unit) and pay a higher price for imported gas (at $14-16 a unit) was resulting in a transfer of wealth to foreign countries.

Stating that the present gas pricing policy benefits "the Indian people at large", the government has rebutted another charge by RIL - that the current domestic gas sale price formula violates the public trust doctrine.