High gas price not in public interest: SC
31 October 2009
In what may prove the death blow to the government's patently weak case in the dispute over natural gas from Reliance Industries Ltd's Krishna-Godavari Basin block, the Supreme Court observed on Friday that the sale of gas at $2.34 per mmBtu may not only end the dispute between the two Ambani brothers, but may also be in the public interest.
Hearing the case between Mukesh Ambani's RIL and Anil Ambani's Reliance Natural Resources Ltd for the sixth day, the Supreme Court bench comprising Chief Justice K G Balakrishan and justices R V Raveendran and P Sathasivam, said the basis for fixing the government-mandated gas price of $4.20 per unit needed examination.
"If the price (of the gas produced from RIL's KG-D6 block) is set at $2.34, then it will not only end the dispute between two companies but also be in the public interest. Fertiliser and power companies will get gas at a cheaper rate. Ultimately, the people will benefit," the bench said.
Justice Raveendran, speaking for the bench, said raising the gas price from $2.34 to $4.20 per unit would make "only you (RIL) the beneficiary and not the public. RIL is gaining and not the public. Is it in the public interest"?
RIL counsel Harish Salve said the $4.20 per unit price benefited the government, as it would make cost recovery quicker and the government would receive a higher share for a longer period.
The court, however, said the basis for fixation of price for sale of KG gas at $4.20 per unit required consideration.