Allegations of favouring Reliance Industries baseless: Oil Minister - NDTV

New Delhi: Strongly refuting allegations of favouring Reliance Industries Limited (RIL), Oil Minister M Veerappa Moily today said the proposed revision in natural gas price will apply to all companies including state-owned ONGC. Moily thrashed CPI MP Gurudas Dasgupta's allegations of favouring RIL as "totally false and baseless" and said the proposed increase in natural gas price was being done "strictly in line with the formula proposed by Prime Minister appointed panel headed by his economic adviser C Rangarajan." "It is totally false and baseless. The new pricing, if approved by the Cabinet Committee on Economic Affairs (CCEA), will apply to all gas produced in the country. Two-thirds of the gas produced in the country is by public sector companies (like ONGC) and the new pricing will apply equally to them and they stand to benefit more out of it," he said. In a point-by-point rebuttal to allegations made by Dasgu pta at a press conference yesterday, Moily said the CPI leader "was wrong in saying that the petroleum ministry has deviated from the recommendations of Rangarajan Committee." The allegations of a gigantic scam in making "are not only devoid of merits but also are malicious and based on distorted facts". The price revision besides being contractual requirement, was needed to spur investment in oil and gas exploration which has stagnated over past few years, he said. Gas finds in deep-sea are not economically viable to develop at current rate of $4.2 per million British thermal unit. "Mr Dasgupta talks of fertiliser subsidy rising due to gas price increase but what he does not realise is that if domestic production does not increase, we will have to import gas and imported gas (LNG) costs triple the domestic gas price," Mr Moily said. The government stands to gain from rise in domestic gas price by way of increased royalty, profit petroleum as we ll as taxes which can be used to make up for increased subsidy. Moily was attending an oil and gas conference in Bangkok when Dasgupta made the allegations at a press conference yesterday at New Delhi. "What Dasgupta is saying is totally baseless and incorrect. He may be ill-informed about facts," Moily said, adding that the Rangarajan Committee was appointed by Prime Minister on a request from Moily's predecessor S Jaipal Reddy. The panel suggested pricing all domestically produced conventional and non-conventional gas at a mix of international hub prices and actual cost of liquefied natural gas (LNG). The price as per this formula came to $8, but in the note to CCEA, the Oil Ministry modified it to bring it down to $6.775 per mmBtu. "Spreading false information will scare away investors," he said. "We need technology and investment to explore and produce more domestically so as to cut reliance on imports." Mr Moily said the Rangarajan panel fo rmula has to be approved by the CCEA and views of the other ministries and Planning Commission shall be placed before the Cabinet for consideration. "The proposed pricing guidelines shall be equally applicable to both the private and public sector companies. It may also be highlighted that more than 60 per cent of the natural gas in India is still produced by the public sector companies. Therefore, the allegation that the price is being revised for the benefit of the private sector is completely misconceived," a statement issued by the Ministry said. Moily also refuted Mr Dasgupta's allegation that Oil Secretary Vivek Rae was not on the same page on gas price revision. "There is no question of Secretary opposing (gas price revision). We are only forwarding Rangarajan panel recommendations to the Cabinet." Use of imported gas would result in 2 to 3 times higher subsidy outgo for fertiliser and power. via Business - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNHR59BasbvQRbNfprpMGLLDfkbSdA&url=http://profit.ndtv.com/news/industries/article-allegations-of-favouring-reliance-industries-baseless-oil-minister-322613

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