Ambanis take their battle to petro secy

The four-cornered gas dispute involving the Ambani brothers, the National Thermal Power Corporation (NTPC) and the petroleum ministry echoed in the chambers of the petroleum secretary on Thursday.

While Anil Ambani highlighted the discrepancy between what Reliance Industries Ltd (RIL) was charging and international prices, the Mukesh Ambani group chose to focus its attack on NTPC in its letter to petroleum secretary, RS Pandey.

In his letter, AN Sethuraman, president, Reliance Anil Dhirubhai Ambani Group, wrote that the spot prices of gas have plunged to $2.73 per million btu, while RIL continues to charge $4.2 per million btu in India.

“As against this dramatic collapse in prices globally, the price consumers are paying for RIL’s KG basin gas (in the last one year) has actually gone up by over 20%... because the said price of gas, a domestic natural resource for sale in the domestic market, has... been denominated in a foreign currency,” he said.  

Sethuraman also asked Pandey why his ministry has not intervened in the dispute between RIL and NTPC, even though the issue is similar to the dispute between the two Ambani brothers.

“In contrast to the hands-off approach in the RIL-NTPC case, the ministry has chosen to actively intervene in a similar commercial dispute between the two corporates,” he said, referring to the many petitions submitted by the petroleum ministry in the Ambani brothers’ dispute.

But Sethuraman’s was not the only missive that Pandey received on Thursday. He also got a letter from PMS Prasad, president of RIL’s petroleum business, targeting NTPC.
Six days ago, NTPC had written to its parent, the power ministry, urging it to prevent any damage to its interests that may arise from the petitions filed by the petroleum ministry in the Supreme Court.

In the letter, NTPC had said that RIL had been well aware of its rights and obligations when it bid to supply gas at $2.34 per million btu and it cannot be allowed to do an about-turn.

Petroleum minister Murli Deora, too, had made a statement in Parliament that NTPC could not get gas at $2.34 per million btu since RIL had failed to submit that price to the government for approval.

Prasad said NTPC had acknowledged the need for a government nod to the gas supply contract and this necessarily meant that the bid price was also to be approved. “As part of NTPC’s tender process, the draft agreement [attached to the tender notice] by the NTPC itself specified… that the ‘seller shall have obtained approval under laws’,” Prasad pointed out, adding that RIL submitted an unconditional bid at $2.34 only because NTPC promised to look into other approvals later.