RIL tells SC that it cannot supply gas below $ 4.24 a unit

Reliance Industries Limited (RIL) - a Mukesh Ambani Group company told the Supreme Court that it cannot supply natural gas below the rate of 4.24 dollar per unit. 



Senior counsel Harish Salve appearing for RIL continued his arguments for third day against the judgement of Bombay High Court allowing the petition of Reliance Natural Resources Limited (RNRL), a Anil Ambani Group company directing RIL to supply natural gas from Krishna-Godavari Gas Station to Dadri-based power project of RNRL at the rate of 2.34 dollar (Rs 112 approximately) per unit, in terms of family MoU dated June 18, 2005. 



Mr Salve submitted before a bench comprising Chief Justice K G Balakrishnan and Justices R V Raveendran and P Sathasivam that if RIL is forced to supply gas below the rate fixed by the Union Government, it will adversely affect the Profit Sharing Contract between RIL and Union Oil Ministry and the profits of the Union Government will go down. 



Mr Salve has also contended that the family settlement cannot prevail over the Gas Utilisation Policy of the government and High Court committed an error while ignoring this fact. 



According to Mr Salve, RNRL cannot claim that the government has no locus in the matter of fixing the rates of the gas and also in regulating its supply as natural gas is a national asset and government can interfere in larger public interest. 



As per the family settlement of June 2005, RIL has to supply natural gas to RNRL at the rate of 2.34 dollar per unit for 17 years. The Union Government increased the rates in 2006 to 4.24 dollar per unit and this decision of the government was challenged by Anil Ambani in Bombay High Court. 



The SC is hearing three petitions filed by RIL, RNRL and Union Oil Ministry. Justice Raveendran had suggested to the parties either to settle the dispute out of court or through arbitration. 



The arguments will continue on October 27. Senior Counsel Ram Jethmalani is appearing for Anil Ambani.