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Isn't selling gas cheaper in national interest? SC asks RIL
On day-six of the Ambani gas war in the Supreme Court, the bench raised the question of whether gas from the KG D6 basin can be reserved for NTPC and RNRL. The bench also raised the question of whether price of 4.2 mmbtu is beneficial for all or not.
On day six of the gas battle between Reliance Industries (RIL) and Reliance Natural Resources (RNRL), the Supreme Court bench raised the question of whether gas from the KG basin D6 block can be reserved for RNRL and power company NTPC. The bench also raised the question of whether selling gas at a costlier price of USD 4.2 per unit - the price asked by RIL - would be beneficial only to the company's shareholders. CNBC-TV18's Nayantara Rai reports.
RIL Senior Counsel Harish Salve was asked by the SC bench whether pricing gas at USD 2.34 per unit would be beneficial for the power and fertilizer sectors.
Salve's reply was that the government stands to gain at USD 4.2 per unit rather than at the cheaper price. RIL's take: as per the production sharing contract, the government gets about 15% of the revenues till RIL recovers its entire cost and after which its share goes up to 90%.
The higher the price of the gas, the sooner RIL recovers its costs and hands over the revenues to the government.
At USD 2.34 per unit, the government stands to lose Rs 54,000 crore, RIL said. The RIL counsel also pointed out that at the price of USD 2.34 per unit, RIL would recover its cost in eight to nine years as opposed to about four to five years at USD 4.2 per unit.
On day six of the gas battle between Reliance Industries (RIL) and Reliance Natural Resources (RNRL), the Supreme Court bench raised the question of whether gas from the KG basin D6 block can be reserved for RNRL and power company NTPC.
