Gas price burden will be passed on to consumers: NTPC

The power ministry, which is the administrative ministry of state-owned National Thermal Power Corp Ltd, has said if the country's biggest power generator is denied gas from Reliance Industries Ltd's Krishna-Godavari block at $2.34 per mBtu, it will not take the burden but pass the additional cost on to the customers.

"In the event that gas is not supplied to NTPC at $2.34 per mBtu (the earlier agreed price), the burden of extra price of gas would be passed on to the customer as the fuel cost is a pass-through as per regulations for fixing tariff under Electricity Act, 2003," the power ministry said in its submission to the Parliamentary Committee on Public Undertakings on Wednesday.

In what is perhaps the most bizarre part of the gas dispute between the two Ambani brothers, two arms of the government seem to be fighting each other.

While NTPC is fighting a legal battle with RIL in the Bombay High Court over supply of 12 mcmd gas at $2.34 per mBtu, the petroleum ministry – which claims complete control over the pricing and distribution of RIL's gas – insists on a price of $4.20 per mBtu.

Reliance Industries had, in 2001, bid for an NTPC tender for supply of the gas for expansion of NTPC's Kawas and Gandhar power plants in Gujarat. The Mukesh Ambani firm did not sign a final gas sale and purchase agreement (GSPA) with NTPC despite emerging as the lowest bidder, and the power major dragged it to court in December 2005.

Meanwhile, the Supreme Court on Wednesday asked the Mukesh Ambani-promoted Reliance Industries whether it was not the intention of mother Kokilaben to strike a balance between her two sons by giving gas field assets to RIL and supplying natural gas to the Anil Ambani-promoted Reliance Natural Resources (RNRL) at a concessional rate. The two brothers are fighting a legal battle in the apex court over the pricing of natural gas produced by RIL from KG-D6.