By IANS
New Delhi : The Supreme Court Wednesday revived a central government notification, mandating state-run oil and natural gas enterprises to work out an average and uniform price for its old and new customers.
A bench of Justice Ashok Bhan and Justice V.S. Sripurkar revived the March 6 notification of the petroleum and natural gas ministry, suspended since July 31 by the Gujarat High Court on petitions by the Gujarat State Petroleum Corporation (GSPC) and its consumer Essar Steel.
The apex court revived the ministry notification on a bunch of applications by Indian Oil Corporation Ltd and other public sector undertakings (PSUs), which said the high court stayed the notification without hearing them.
The other central PSUs in the oil and gas sector which had approached the apex court include Petronet LNG Ltd, Gail India Ltd, Indian Oil Corp and Bharat Petroleum Corporation Ltd.
The bench asked the high court to adjudicate afresh on Sep 10 the GSPC petition against the ministry’s notification after hearing the central PSUs.
It fixed Aug 31 as the date for the central PSUs to file their replies to the GSPC petition in the high court. The GSPC, in turn, was asked to file its counter-reply by Sep 5.
Supporting the government’s notification for uniform gas pricing for their old as well as new customers, the PSUs informed the apex court that Petronet LNG Ltd imports liquefied natural gases (LNG) from Ras Gas Compnay Limited of Qatar under a term contract signed in 1999.
Petronet LNG, in turn, supplies gas to various state PSUs like ONGC for onward supply to their consumers and end-users as per another set of term agreements with them.
As the international crude prices were pegged at around $20-22 per barrel at that point of time, the prices to the existing end-users like Essar Steel at that time worked out between $2 and $3 per MMBTU, effective till December 2008.
But with Petronet LNG signing another term agreement with the Qatar-based firm in July 2007 at a higher rate – as the international crude prices were then hovering between $65 and $70 – the gas prices worked out to above $9 to new customers like the Dabhol power project.
The ministry had issued the notification on the uniform gas pricing, fixing around $4 per MMBTU to end this steep disparity of prices between the existing consumers and new consumers as state firms would not have been able to sell LNG at such a high rate.
GSPC, however, had challenged the uniform pricing notification at the behest of its old consumers.