SC finds merit in PIL against gas price hike. SoniaG UPA's foulplay exposed.

With the increase set to have a spiraling effect on the price of electricity and fertilizers, the senior Parliamentarian sought a stay of the proposed hike in gas price from US $ 4.2 MMBTU to US $ 8.4 next year set to gradually increase to 14 MMBTU over a period of five years. The PIL accused the Government of favouring Reliance Industries Limited and Niko Resources Limited - the joint contractors operating the KG Basin, even in the face of gross under-production.

The CAG, on examining the production sharing contract, recommended RIL to relinquish the excess land held by it beyond the gas discovery region and suggested the Centre to penalize RIL over breach in contract terms. RIL chose arbitration, but even after the two parties chose an arbitrator, the process got stalled due to non-appointment of the third arbitrator. The PIL alleged that coming under duress from the private companies, the Petroleum Minister was changed in November 2012 and Moily was brought in who put the arbitration process in cold storage. The petitioner further accused the Minister of overruling the Director General Hydrocarbons and the CAG by not insisting on relinquishment of land by RIL.

Having failed to secure a response to his allegations despite addressing two letters to the Prime Minister, Dasgupta said that the Government’s move was anti-poor and sought the Court’s intervention as it impacted food and energy security of the country.

The Court faced resistance from RIL and Niko, represented by senior advocate Harish Salve, who apprehended that the Court proceedings should not come in the way of an arbitration proceeding pending between the Government and RIL on the CAG’s assertions and demand for relinquishment. Salve further informed that his clients were in the process of moving appropriate application to appoint the third arbitrator.

Dasgupta, through his lawyer senior counsel Colin Gonsalves told the Court that production was deliberately reduced by contractors (RIL-Niko) in anticipation of the price hike. The huge gap in supply became grave over the years as in 2011-12 the actual production was 42 mmscmd as against approved production of 70 mmscmd. The next year it dropped further to 25 mmscmd and in 2013-14, it has only been 15 mmscmd.