Supreme Court defers hearing in RNRL-RIL row to 20 October

The Supreme Court has deferred the hearing on a petition filed by ADAG group company Reliance Natural Resources Limited (RNRL) with regard to the KG basin  gas pricing dispute with Reliance Industries to 20 October.

chief justice K G BalakrishnanThe Apex court deferred the hearing on a request filed by Mukesh Ambani's Reliance Industries Limited (RIL). Approving the request the apex court bench headed by chief justice K G Balakrishnan decided to post the matter for October.

The cross appeals filed by Reliance Natural Resource Limited and Reliance Industries Limited (RIL) on the petition filed by the petroleum ministry were to be taken up for hearing on 1 September.

The Ambani brothers have been at loggerheads on the sharing of gas from the Krishna Godavari field in Andhra Pradesh.

The RIL-RNRL gas dispute pertains to gas from the KG basin D6 block with RIL, the government appointed contractor proposing to sell gas to RNRL as also other parties like NTPC and fertiliser companies at the government-decided price is $4.2 per unit. However.

in the family Memorandum of Understanding (MoU) signed during the 2005 de-merger of Reliance between the brother, RIL had committed sale of 80 mmscmd of gas to RNRL at a discounted price of $2.34 per unit for 17 years.

The positions of the parties in the dispute is:

RIL says it is merely a contractor the KG basin gas issue and can sell gas only at the government approved price of $4.2 per unit and that it would lose around Rs30,000 crore if the Supreme Court were to direct it to honour the commitment of $2.34 per unit to RNRL.

  • RIL is also involved in a similar dispute with government-owned NTPC
  • RNRL has accused RIL of discounting national interest for corporate greed and also accuses the government of colluding with RIL and harming NTPC's interest
  • NTPC is also fighting a battle with RIL to procure gas at the lower rate, however the NTPC–RIL case has been decided to be kept different from the RIL-RNRL case
  • The government says gas being a national resource, RIL cannot be expected to sell it to RNRL at a subsidised rate.