By IANS
Mumbai : Ahead of the crucial meeting of the high-powered, empowered Group of Ministers (eGOM) to discuss the issue of the controversial pricing of the Krishna-Godavari gas, the war of words between the Ambani brothers seems to have escalated.
While Mukesh Ambani-owned Reliance Industries Ltd. (RIL) group has warned of “cartelisation” if it is asked again to seek price bids from customers on the natural gas it plans to produce from its eastern offshore KG-D6 fields, younger brother Anil Ambani promoted Anil Dhirubhai Ambani Group (ADAG) has countered the statement, calling it “shocking” move to prevent a transplant re-bidding process.
RIL’s President and CEO Petroleum P.S.M. Prasad, in a letter to the Petroleum Secretary M.S. Srinivasan Monday, said: “The bidding process followed by RIL was transparent and legally competent process in line with the provisions of the Production Sharing Contract.” He alleged that any fresh bidding process for price discovery would distort the market and lead to a “cartelisation”.
Reacting sharply to RIL’s contention, ADAG said that it was shocking that RIL, which has a monopoly on gas production, was raising the bogey of “cartelisation, in order to prevent a transparent re-bidding process”.
“It is shocking that RIL is raising the bogey of cartelisation, despite having a monopoly on gas production to prevent a transparent re-bidding process,” Reliance Energy Ltd, (REL) Director J.P. Chalasani said.
Chalasani, in an e-mailed statement to IANS Monday, alleged that RIL’s arrogance is now transgressing all limits.
“RIL’s arrogance is now transgressing all limits, as it trashes the findings of a Committee of Secretaries of the government of India and the Prime Ministers Economic Advisory Council, which advocated a fresh and transparent re-bidding process,” Chalasani said.
The REL chief said, “RIL is holding the growth of the power and fertilisers sectors to ransom, by demanding artificially inflated pricing for gas, owing to its monopoly producer status.”
Prasad has expressed fears that bidding will be now done under a pre-conceived allocation mechanism under the so-called utilisation policy.
RIL said: “If the government does not declare a policy on allocation for a certain sector of companies it would lead to cartelisation by parties and not constitute a process of arms length of price discovery in as much as the price that the favoured allotees of gas would be willing to pay would never be reflective of the true market price of gas.”
The RIL said that no such policy can now be formulated for the existing Pricing Sharing Contract without jeopardising the rights of parties to contract.