SC seeks response from Centre, RIL, Moily on gas pricing

This, after PIL seeks rethink on govt's decision on gas pricing based on Rangarajan formula

The Supreme Court today sought a response from the Centre and Reliance Industries on a public-interest litigation (PIL) filed by CPI leader Gurudas Dasgupta and former power secretary EAS Sarma.

The matter is scheduled for further hearing on Spetember 6.

“Today, the Apex Court has asked the Centre, RIL, petroleum minister M Veerappa Moily and petroleum ministry to come up with a response,” Dasgupta told Business Standard.    

Through the PIL, Dasgupta was looking at a rethink on the government’s decision based on Rangarajan formula.

Rangarajan committee had proposed a pricing by taking an average of the US, Europe and Japanese hub and then averaging it out with the netback price of imported liquefied natural gas (LNG) to give the sale price of domestically-produced gas.

Earlier, Dasgupta had alleged that Moily is working in favour of the Mukesh Ambani-led Reliance Industries (RIL) by pushing for a gas price hike, saying that it would cost an additional subsidy burden of Rs 76,000 crore. In response to that Moily had said that an import lobby is in action working against gas price hike.

The Rangarajan formula is set to almost double the gas price from the current $ 4.2 per million metric British thermal unit (mmBtu) to the range of $ 8 per mmBtu. The pricing would be up for a quarterly review also, based on the international pricing system.  

The decision was expected to cost Rs 42,000 crore for about 28,000 mega watt of power capacity dependent on gas, while the fertilizer subsidy would zoom by Rs 13,200 crore per annum due to the current hike.