RCF demands cheaper gas in K-G dispute
29 Sep 2009
Pending a Supreme Court decision that could prove crucial for India's infrastructure development, state-owned Rashtriya Chemicals and Fertilisers too has demanded its share of the gas pie at a price cheaper than that mandated by the union government.
Talking to the media after RCF's annual general meeting in Mumbai on Saturday, the company's chairman and managing director U S Jha demanded price parity with the National Thermal Power Corp and Reliance Natural Resources Ltd for the gas supplied by Reliance Industries Ltd from its eastern offshore block.
RNRL and NTPC are fighting legal cases separately for obtaining gas at $2.34 per mmBtu, lower than the government approved rate of $4.34 per mmBtu from Reliance Industries' K-G D6 fields.
As the case gets increasingly tangled, experts are unanimous in blaming the government for being clueless clue about where the end of this tangled web lies. While Murli Deora's petroleum ministry insists on complete control over the distribution and price of K-G gas, other government-run companies like NTPC and now RCF are fighting their owners in the apex court.
Jha said that if RCF gets gas at $2.34 per mmBtu, then the company's profitability can rise by 20 per cent over the previous fiscal. "If that price is at arm's length basis, then it has to be extended to fertiliser companies as well," RCF Chairman and Managing Director U S Jha said.
An 'empowered group of ministers', headed by Pranab Mukherjee (then the defence minister) had decided a couple of years back that fertiliser companies should get top priority on K-G gas. However, it is up to the Supreme Court to decide at what price these companies would get the vital input.
"We are looking forward to the judgement in this case, because it will have a direct bearing on our physical and financial performance," Jha said.
