Government helping RIL commit daylight robbery: RNRL

Anil Ambani's Reliance Natural Resources Ltd told the Supreme Court on Tuesday that the government approval given to a formula that allowed Reliance Industries Ltd to ''inflate'' the unit sale price of gas was akin to daylight robbery.

Ram Jethmalani, senior counsel for RNRL, claimed this could be proved by cross-examination of petroleum and natural gas minister Murli Deora.

The formula was linked to the international crude oil price in a way that when the crude price is $25 a barrel, RIL would get a price of $2.5 per mmbtu of natural gas. ''When the crude price goes up a bit to $26, RIL would get $3.5 per mmbtu, a steep increase of $1 per unit of natural gas,'' Jethmalani said.
Concluding his arguments before a bench comprising Chief Justice K G Balakrishnan and Justices B Sudershan Reddy and P Sathasivam, Jethmalani said, ''We all need not be wizards in mathematics to understand this daylight robbery.''

Jethmalani said that the oil ministry had, in various submissions, conceded that Reliance Industries Ltd had complete marketing freedom. ''This would allow RIL to sell gas to whichever party it wants, including RNRL.'' But later, the ministry changed its stance to say that government approval was a prerequisite for RIL before selling gas.

RIL is arguing that the supply of gas from its Krishna-Godavari Basin block is subject to government pricing policy and approval, while RNRL insists that the original family agreement arrived at in 2005 should be honoured.

said RIL, after doing all the calculations, had written to the centre as late as April 2006 suggesting that the price gas be fixed at $2.34 per unit for RNRL based on the NTPC model, said Jethmalani, reading out the RIL letter.