The NDA government today told the Supreme Court that the fresh guidelines framed by it would "supersede" previous UPA dispensation's policy on price fixation for natural gas, including that from Krishna-Godavari basin, which has been the bone of contention between the Centre and Reliance Industries Ltd (RIL).
"Government has issued new guidelines. It is not going by the formula for gas pricing recommended by C Rangarajan Committee and the new guidelines would supersede the earlier guidelines," Solicitor General Ranjit Kumar submitted before a bench headed by Justice T S Thakur.
The Centre's response was to the question raised by the court on September 18 asking it to make its stand clear on fixation of the price for gas from Krishna-Godavari basin as to whether it sticks to the previous UPA dispensation's policy or making any departure from it.
The Solictor General said 'new domestic natural gas policy' was approved by the government on October 18 raising natural gas price to USD 5.61 per mmBtu from November 1 and "recommendation of the Rangarajan Committee would not be given effect".
The Rangarajan formula on gas pricing was approved by the previous UPA government. Rangarajan was Chairman, Economic Advisory Council to the then Prime Minister.
The Solicitor General said he will place before the bench the submissions to butress why the new guidelines are better than the earlier recommended.
The bench was hearing the PILs filed in 2013 by senior CPI MP Gurudas Dasgupta and the NGO, Common Cause, challenging the UPA government decision to double the price of natural gas from 4.2 US dollar to 8.4 dollar per mmbtu and seeking cancellation of Reliance Industries Ltd's contract for exploration of oil and gas from the KG basin.
The third PIL on the issue has been filed by advocate M L Sharma. Responding to the bench's query, senior advocate Harish Salve, appearing for RIL, said "he is not happy with the new guidelines".
He also submitted that the court should hear the matter after the proceeding before an arbitral tribunal on the dispute of gas pricing between RIL and Centre is decided.
While the Centre maintained that the issue raised by Dasgupta has been addressed with the new guidelines, advocate Prashant Bhushan said several other issues raised by him in the NGO's petition needs to be argued and also claimed that a draft CAG report suggested that RIL "hugely over-estimated" the reserves of the KG gas block and other irregularities are cited.
The bench, also comprising justices J Chelameswar and Kurian Joseph, asked the Centre to place on record within three weeks the new guidelines on gas pricing and also the response to NGO's application on the draft CAG report.
The bench posted the matter for January 16 next year for passing some direction.However, before the conclusion of the day's hearing, Bhushan apprised the bench about various other issues raised in the NGO's petition including the alleged fraud committed by RIL requiring government to take back the field. He said there was a need for court-monitored probe on the issue.
Dasgupta and the NGO had said government should be asked not to make "any further increase" in the price of gas produced by RIL from KG basin.
RIL has refuted the allegation of extraneous consideration for the increase in the gas price from 4.2 dollar to 8.4 dollar per mmbtu for the gas taken from the existing fields like KG D-6 basin.
RIL had submitted that the gas output from KG basin has fallen to 8 mscmd against expected 80 mscmd due to "technical reason".
M Veerappa Moily, the then Union Minister of Petroleum and Natural Gas, was also named as one of the respondents in the petitions. The PILs have also sought imposition of penalty on private parties for failure in adhering to commitments.
The petitioners have also sought a direction for a thorough audit by CAG of the working of the production-sharing contract (PSC) governing KG block, gold plating by RIL, underproduction by RIL and all related issues.
The CPI MP had alleged collusion between the government and the company, saying RIL "is holding country's energy security to ransom". He said natural resources belong to the citizens and the government.
The Common Cause has supported Dasgupta's arguments and referred to controversial intercepted telephonic conversations between former corporate lobbyist Niira Radia with others to support the allegation of collusion.
The NGO has urged that Centre should wait for the outcome of the two petitions pending before the apex court.
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