Govt to inform HC about RIL gas supply cuts

The government will inform the Delhi High Court this week whether oil ministry's decision to cut gas supplies from Reliance Industries' (RIL) KG-D6 fields to non-core users like steel plants should be referred to a ministerial panel.

Essar Steel, which was allocated 3.2 million cubic metres per day (mmscmd) of KG-D6 gas, has challenged the ministry's order to restrict supplies to non-core users in steel, refineries and petrochemicals sectors because of falling output from there.

Additional Solicitor General AS Chandioke, appearing for the government, told that the High Court that he would take instructions on the issue and inform the court on Thursday.

The response came after Justice S Muralidhar asked the Centre if it had any prejudice if the matter was referred to the Empowered Group of Ministers (EGoM).

The matter has been posted for next hearing on May 26.

EGoM had in 2008 and 2009 allocated KG-D6 gas among users like fertilisers, power, steel, petrochemical and refineries.

But with KG-D6 output falling to less than 50 mmscmd, from 61.5 mmscmd in March last year, the ministry has ordered Reliance to supply gas first to priority users in power and fertiliser sectors. Current output from KG-D6 is just enough to meet the contracted demand of priority sector leaving very little for users like Essar Steel.

Mukul Rohtagi, appearing for Essar Steel, contended that the ministry was not competent to take such a decision and the authority rested with EGoM.

He said the Gas Sales and Purchase Agreements (GSPAs) signed between seller (Reliance) and buyers like Essar provided for a pro-rata or proportionate cut in supplies on all users in case of fall in supplies.

On May 9, the court had refused to stay the decision of the ministry.

"Right now I am not going to stay the [Centre's] order," Muralidhar had said, after the Centre indicated that it would give its opinion on the plea after perusing the Bombay High Court's order on a similar petition.

"Right now we cannot give an opinion without perusing the Bombay High Court order on the issue. We will have to take an instruction as well," Chandioke had told Justice Muralidhar.