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Kejriwal in row with India’s top business house over gas prices

NEW DELHI: Delhi State Chief Minister Arvind Kejriwal locked horns with India’s Union Government and country’s topmost business house on Tuesday when he asked the Anti-Corruption Bureau (ACB) to probe the proposed increase in prices of piped and compressed natural gas.
Kejriwal, who has ruled India’s national capital for over a month, asked the bureau to file FIRs against Union Minister for Petroleum M. Veerappa Moily, the latter’s predecessor Murli Deora, chairman of Reliance Industries Limited (RIL), Mukesh Ambani, V. K. Sibal, former director general of Hydrocarbons, a department under the Petroleum Ministry, and others on the basis of a complaint submitted by a group of eminent citizens campaigning for probity in public life.
The complaint alleges that the proposed increase in prices of gas from the existing $4.2 per mmbtu (one million British Thermal Unit) to $8.4 per mmbtu from April this year is a result of collusion between the RIL and some ministers of the government.
It alleges that the increase would cost India a minimum of $8743.783 every year and help the RIL to make windfall gains.
The complainants allege malafide in the proposed increase saying that the government made no attempt to determine the cost of production independently and accurately and took the decision just before demitting office.
Prime Minister Manmohan Singh’s government would complete its five year term in May this year and India is scheduled to elect a new government before that.
The complainants asked as to why the government took no action against the RIL for a deliberate drop in production of gas in the past and ignored a report of country’s constitutional auditor and opinion of its own Solicitor General Rohinton Nariman which reflected adversely on the company.
They have also charged the government with fixing the gas prices in dollar to add to the profit of the corporate house.
When the gas produced by the RIL is consumed internally why the prices are not fixed in Indian rupee, they asked, saying that the government ignored representations sent by several parliamentarians against the proposed hike.
Kejriwal claimed that the proposed increase in gas prices would have a cascading effect on prices of electricity (generated by gas-based plants) and fertilizers in the country and cause immense hardships to common man.
He said he would write to the prime minister to suspend the decision on increase in gas prices till the ACB probe was on, saying that the details in the complaint were “shocking” and amounted to an assault on India’s economic sovereignty.
Indian government entered into a production sharing contract with the RIL and Niko Resources Limited in 2000 for exploration of natural gas in Krishna Godavari basin off coast of Andhra Pradesh.
Four years later, the RIL signed long term agreement with National Thermal Power Corporation to supply gas at $2.34 per mmbtu for 17 years. Niko has a similar agreement with Bangladesh government.
In 2007, the then Petroleum Minister Murli Deora revised the gas price to $4.2 per mmbtu after the RIL refused to supply gas to the NTPC and Reliance Natural Resources Limited (RNRL), a company owned by Mukesh Ambani’s younger brother Anil Ambani, on the agreed price. Deora was brought into the ministry in place of Mani Shankar Aiyar who was not in favour of increasing the price.