By IANS
New Delhi : The Communist Party of India-Marxist (CPI-M) Thursday asked the government to reject in public interest the decision of a ministerial panel to permit Reliance Industries to fix a “highly inflated” price for gas discovered in the Krishna-Godavari basin.
The decision taken Wednesday by the empowered group of ministers (EGOM), which met under External Affairs Minister Pranab Mukherjee, will “severely affect the viability of consumer industries like power and fertiliser, which in turn would hit the common man,” the party said in a statement.
A statement from the party politburo said the EGOM has agreed to the formula of Mukesh Ambani-led Reliance Industries, linking it with international price of crude oil and not with the actual cost of producing gas in the country.
“There is absolutely no justification for such a linkage which is being made only to find a route to artificially inflate the price for windfall gain of the company,” the statement said.
“The recommendation of the EGOM should be rejected in public interest,” adding the EGOM agreed to the price that is a token reduction from the price of $4.33 per million metric British thermal units (MMBTU) claimed by the company.
The CPI-M, which has earlier asked the government not to agree with the formula, said the gas price should be based on the actual cost of production along with a “reasonable” profit.
“The pricing can not be left to the so-called market forces based on import parity only to encourage super profit to the investors who have been given contract under production sharing contract (PSC).”
The communists said Reliance Industries was just a “contractor selling gas owned by the Union of India” and that the constitution directed the State to ensure that the ownership and control of material resources of the country were distributed to serve the common good.
“The inflated gas price is not sub-serving the common good because of the arbitrary nature of pricing and its adverse impact on price of power and fertilisers.”
It accused the government of weakening the “genuine case” of the state-owned National Thermal Power Corp (NTPC), which along with Anil Ambani-led Reliance Natural Resources has been fighting a legal battle in Mumbai High Court.
The party said according to International Competitive Bidding in 2004, the private company was obligated to supply gas from the Krishna Godavari basin at a rational price of $2.34 per mmbtu.