Tax holiday withdrawal a hit below the belt: RIL
07 Sep 2009
While Anil Ambani's Reliance Natural Resources Ltd has mounted a strident media campaign against elder brother Mukesh Ambani's Reliance Industries Ltd over the gas price dispute, RIL has so far chosen a more dignified stance, rarely bothering to reply to RNRL's high-decibel accusations.
However, it now seems to have seen a need to publicly rebut RNRL's accusations. P M S Prasad, RIL executive director and head of its petroleum and natural gas business, has been tasked with defending RIL's position.
In an interview to CNBC-TV 18 last week, Prasad said RIL has not been able to scale up gas production due to delays in the formation of the new empowered group of ministers (See: Deora wants new ministers group set up for RIL gas). RNRL has been accusing it of deliberately slowing down output and hoarding gas.
On another of RNRL's major accusations, he said the government-mandated price of $4.2 per mmbtu for RIL's Krishna-Godavari gas is perfectly fair, being cheaper than the rest of the gas being sold in India, except in the administered price mechanism.
Prasad repeated most of his earlier points in an interview to Business Standard published today. He again dismissed RNRL's claim that buying gas at this price would entail a loss of Rs30,000 crore for the state-owned National Thermal Power Corporation, which is also party to the dispute that is now before the Supreme Court.
He said Reliance offered a fair deal to NTPC, which however did not accept it and went to court. He feels NTPC is the loser, because it is buying more expensive gas from elsewhere. Buying RIL's gas would in fact cut its production costs by about 50 per cent, he added.
