DGH asks for clarification from RIL on gas deal

The Directorate General of Hydrocarbons (DGH) has sought clarifications from Reliance Industries Limited on its gas sales purchase agreement with Reliance Natural Resources Limited.

The Directorate General of Hydrocarbons (DGH) has sought clarifications from Reliance Industries Limited (RIL) on its gas sales purchase agreement (GSPA) with Reliance Natural Resources Limited (RNRL). After getting the required clarifications from RIL, DGH will take a final call on the controversial RIL-RNRL GSPA, subject to the petroleum ministry’s approval.

Confirming the development, Director General of Hydrocarbons V. K. Sibal said, ‘‘We have asked for some documents from Reliance seeking some clarity on the pricing methodology and other issues.’’

When asked if the government would lose Rs 25,000 crore if the RIL-RNRL deal was approved by the ministry under the present terms and conditions, Sibal said, ‘‘We are closely looking into the matter and nothing has been finalised yet. A conscious decision would be taken soon keeping the interest of all the parties in mind.’’

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Sources in Reliance said, ‘‘No government approval is required on pricing of gas from RIL to RNRL or any other company.’’ Even RNRL has written to the petroleum ministry, stating that under clause 21.6 of the PSC, no government approval was required.

Article 21.6.1 of PSC stipulates that the contractor would endeavour to sell all gas produced and saved from the contract area at arm’s length prices to the benefit of the parties to the contract.

Also, Article 21.6.3 of the PSC provides that the formula or basis on which the prices would be determined, would be approved by the government prior to the sale of gas to the consumers.

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