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Plea in Supreme Court to stay government's decision to double gas price

Friday, 7 March 2014 - 9:25pm IST | Agency: PTI

An NGO today moved Supreme Court seeking a direction to restrain the Centre from doubling the price of natural gas which will come into effect from April 1.

The application filed by the NGO, Common Cause, has asked the apex court to stay the decision of government to increase the gas price from 4.2 dollar to 8.4 dollar per mmbtu at least for the gas taken from the existing fields like KG D-6 basin.

The application filed through advocate Prashant Bhushan referred to the two PILs filed last year against government's decision and urged that Centre should wait for the outcome of the two petitions pending before the apex court.

Senior CPI MP Gurudas Dasgupta and Common Cause has challenged the government decision to increase the price of natural gas and the matter is listed for hearing on March 11.

In the present application, the NGO submitted that since the decision to double the gas price will come into effect from April 1, when the term of the present government is about to expire, it ought to have left the decision to new government, since the decision involves serious economic considerations, inflationary consequences and a massive increase in the subsidy burden.

"The fact that this decision was taken in advance by the present government shows that it wanted to favour Reliance Industries Ltd (RIL) for extraneous considerations," it said.

"It is submitted that if the current price that has been in force for the last five years, continues for the next few months, it would not cause serious detriment to any side, especially in view of the fact that RIL has itself admitted that its cost of extraction of gas is dollar 0.89/mmbtu," the NGO said.

The application said, "a stay is called for since valid and serious concerns of the Ministries of Finance, Power and Fertilisers have not been taken into account." "Also, no justification has been given why RIL should get the benefit of the new price even before it delivers its shortfall in gas production at the existing price. A stay would also enable the next government at the Centre to take a fresh view in full cognisance of the fact that it will have to bear the fiscal burden of the decision," the application said.

The apex court on January 6 had listed the PILs for a final hearing on March 4 but it was adjourned for March 11 as the Centre has not filed its response. 

Earlier, the apex court had issued notice to the Centre, RIL and others on the plea seeking cancellation of contract for exploration of oil and gas concerning the Krishna-Godavari basin block and to impose penalty for failure in adhering to commitments. 

The petitioners also sought a direction for a thorough audit by CAG of the working of the production sharing contract (PSC) governing KG block, gold plating by RIL, underproduction by RIL and all related issues. 

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