Not favouring RIL, gas price review to help PSUs too: M Veerappa Moily

NEW DELHI: Oil Minister Veerappa Moily has refuted CPI leader Gurudas Dasgupta’s allegations of favouring Reliance Industries as “totally false and baseless” and said the proposed gas price revision is the government’s contractual obligation, which will also benefit state energy firms.

Dasgupta had alleged that the finance ministry, oil ministry and the Planning Commission colluded to increase Reliance’s KG-D6 gas price significantly “through the generous assistance of the petroleum ministry”.

Moily admitted that the petroleum ministry is finalising a note for the Cabinet Committee of Economic Affairs (CCEA), which is based on recommendations of Dr C Rangarajan, the chairman of the Economic Advisory Council to the Prime Minister.

A Cabinet note contains views of ministries affected by the proposal, but CCEA takes the final call. “It is needless to emphasize that views of the other ministries and Planning Commission shall be part of the proposed Cabinet note and will be placed before the Cabinet ,” Moily said in a statement.

Prime Minister Manmohan Singh had constituted the Rangarajan panel last year on advice of former Oil Minister Jaipal Reddy to look into matters related to oil and gas contracts including gas pricing. The committee proposed a pricing formula last year, which would nearly double the bulk of domestic gas prices from $4.20 per unit.

Moily said “the allegation that the price is being revised for the benefit of the private sector is completely misconceived” as proposed pricing formula, if approved by CCEA, would be applicable to both private and public sector companies engaged in production of natural gas.