TERMINATE Reliance Industries’ (RIL) contract - CPI leader Gurudas Dasgupta

CPI leader Gurudas Dasgupta on Friday urged Prime Minister Manmohan Singh to keep in abeyance the decision to allot doubling of price for gas to Mukesh Ambani’s Reliance Industries Limited (RIL).

Accusing the UPA Government of facilitating the “loot of natural resources from KG Basin by Ambani,” the veteran leader said this largesse exposes that most of the Cabinet Ministers are under the grip of RIL and its owner.

Talking to mediapersons, Dasgupta accused Finance Minister P Chidambaram of not arguing in favour of the stand taken by his Ministry. 

“His Ministry objected to providing 8.4 dollars per unit price to Ambani, citing the huge default of RIL. But Chidambaram did not bring this issue and argued in favour of Mukesh. 

Only Jaipal Reddy upheld the nation’s interest. This exposes the grip of Reliance over the Union Cabinet,” he said.

Dasgupta alleged that this big largesse to RIL was granted due to the ensuing elections for Lok Sabha. “It is indeed ironical that while your Government tried to take high moral ground by passing the Lokpal Bill earlier this week, the very next day it has committed the biggest fraud worth `3.6 lakh crore on the country, by allowing the increase in gas price,” said Dasgupta in his letter to

Prime Minister. 

He pointed out that Thursday’s Cabinet decision to allow doubled price of gas to defaulter RIL was a complete disregard to CAG, the honest officials of Petroleum Ministry and findings of the Regulator-DGH. 

He also accused Finance Ministry of soft pedalling the issue. 

http://www.dailypioneer.com/nation/suspend-decision-to-allot-doubling-of-ril-gas-price-gurudas-to-pm.html

NEW DELHI: Gas price hike for Reliance Industries Ltd (RIL) was not a smooth sail in the cabinet, which allowed the company to nearly double prices from April if it furnished bank guarantees. 

Science and technology minister S Jaipal Reddy was the lone voice of dissent at Thursday's meeting of the cabinet, protesting that doubling the price of gas from RIL-run KG fields was an unprecedented case of a defaulter being rewarded.

The minister, who previously held the oil portfolio, is understood to have made the point that RIL was in breach of contractual obligations and had failed to make up for the shortfall in gas production. 

He criticized the condition of a bank guarantee imposed on RIL as mere eyewash, and said the firm's adamant behaviour and the loss caused due to idling of gas-based power plants did not merit any accommodation of RIL's arguments.

The minister made the point that the huge bank guarantee — the cabinet note itself suggests this might run into $9 billion (If arbitration proceedings linger on) — would be near impossible to execute,

http://timesofindia.indiatimes.com/business/india-business/Jaipal-Reddy-red-flags-RIL-gas-price-hike/articleshow/27696768.cms

A day after the Cabinet decided to provide double the natural gas prices from the current $4.2 mmbtu to Reliance industries against a bank guarantee, the CPI leader Gurudas Dasgupta has written to Prime Minister Manmohan Singh urging him to terminate Reliance Industries’ (RIL) contract.

He has also thrown light on some startling facts on how the oil ministry chose to ignore some of the suggestions of the finance ministry which went against the company.

  The finance ministry had opposed the mechanism of bank guarantee by Reliance Industries as a condition for doubling of natural gas prices saying this could dilute the government's stated position before different arbitration proceedings. But, the petroleum ministry chose to ignore it and went ahead with its decision to award a hike in gas price to RIL from April next year saying it fully protected the interests of the government, Dasgupta said in his letter.

“Bank guarantee mechanism will dilute the government’s stated position before different arbitration proceedings that the shortfall in gas production is on account of the fault of the producer and not geological surprises and that the terms and conditions of production sharing contract have been violated by the producer,” said the terse comment from the finance ministry on the draft cabinet note advocating near doubling of gas prices to Reliance against a bank a guarantee, which was approved by the CCEA Thursday.

Deccan Herald has a copy of the draft Cabinet note, the comment of the finance ministry on it and the subsequent reply by the oil ministry.

The finance ministry had also suggested a cap or floor on gas prices to protect the interest of consumers as well the government in case of an unreasonable upswing in prices but the petroleum ministry replied, “The provision of cap will send a wrong signal to investors.” The finance ministry had also raised concerns on the impact of natural gas prices on power and fertiliser sectors.

 “It cannot be that gas producers will reap unlimited gains in the case of an upswing in global prices, any such upside has to be capped.

 “Power tariff and fertiliser prices as they are directly linked to the gas prices, such upward volatility may impact their prices and a steep rise in their prices will ultimately affect the common consumers by adding to the inflationary trends,” the finance ministry said.

 But the petroleum ministry replied, “The current formula (of pricing) links domestic prices to average price the producers obtain globally. Thereby, the movement of prices in the industry globally will be captured. Arbitrary cap/floor will interfere with such movements and disincentivise production of ‘tough gas’ and gas from frontier areas”.

 The CPI leader alleged that one of the Reliance companies, RGTIL, which handled its gas pipeline business, had earlier defaulted on its commitment regarding bank guarantee to the government.

http://www.deccanherald.com/content/375810/oilmin-favoured-reliance-despite-finmin039s.html