The CPI(M) demanded that the centre reject in public interest the EGoM recommendation allowing RIL to fix gas price at $4.2 per unit from the KG basin.
NEW DELHI: The CPI(M) demanded on Thursday that the centre reject in public interest the EGoM recommendation allowing Reliance Industries Limited (RIL) to fix gas price at $4.2 per unit from the KG basin.
The party said, “The RIL formulation of gas price agreed by the EGoM is based on the linkage with the international price of crude oil, not with the actual cost of producing gas in the country.
“There is absolutely no justification for such linkage being made only to find a route to artificially inflate the price for gain of the private company.”
The CPI(M) said the centre has in the process also weakened the genuine case of the government-owned unit NTPC, which is fighting a legal battle in the Bombay high court against RIL, which is obligate to supplying gas from the KG basin at a rational price of $2.34/unit as per international competitive bidding in 2004.
CPI(M) politburo said the EGoM has “reportedly permitted RIL to fix a highly-inflated price of $4.2/unit for gas from the KG basin which is token reduction from the original price of $4.33/unit claimed by the company.
The inflated gas price is not sub-serving the common good because of the arbitrary nature of pricing and its adverse impact on price of power and fertiliser, the party said. Such a high price would severely affect the viability of consumer industries such as power and fertilizer which in turn would hit the common man, specially the farming community because of escalation in cost of power and fertilizer, it said.
Reiterating that gas price should be based on the actual cost of production and reasonable profit on the same, the CPI(M) said, “The pricing cannot be left to the so called market forces based on import parity only to encourage super profit to the investors, who have been given contract under production sharing contract.
By virtue of article 297 of the constitution, petroleum in its natural state is vested in the union of India, the party said, adding that “RIL is just a contractor selling gas owned by the union of India”.
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