NTPC has no automatic right to cheap gas: government

The government told the Supreme Court today that the price of natural gas offered to state-run power producer National Thermal Power Corp by Reliance Industries Ltd requires the government's approval under the production sharing contract.

"The central government will take an appropriate decision in the case of NTPC as and when the need arises," government counsel Gopal Subramanium said in his statement to the three-judge bench hearing the gas price dispute between the Ambani brothers.

Mukesh Ambani's Reliance Industries Ltd is also locked in a separate legal battle with NTPC in the Bombay high court. NTPC says it has a right to buy 12 million metric standard cubic metres of gas per day at $2.34 per million metric British thermal units under the terms of a tender floated in 2002-03 and won by RIL.

In an affidavit filed before the Supreme Court, the government said the ongoing gas row between RIL and Anil Ambani's Reliance Natural Resources Ltd cannot be equated with the arrangement for NTPC.

The apex court had sought the response after Anil Ambani-led RNRL had consented to government being made a party in the dispute.
The Supreme Court also agreed today with RNRL's argument that the higher price for the

Krishna-Godavari gas mandated by the government will add to the costs of power and fertiliser units, and even burden the government with extra subsidies.