Click to play videoNew Delhi: A crucial group of ministers will be meeting on Thursday to decide on a formula for the price of gas produced by Reliance Industries, the CPI-M has come up with its own fix to cut through the clutter.
Gas produced by Reliance Industries has given the Government a lot of work. The Cabinet secretary has given his report.
The Prime Minister's economic advisory committee headed by C Rangarajan has gone into the issue and now a group of ministers headed by the government's chief troubleshooter Pranab Mukherjee will pronounce on the subject on Thursday.
Ahead of that meeting, the CPI-M politburo Sitaram Yechury has delivered its sentence. Market price, it cannot be it says, the rate should be cost plus reasonable profits.
RIL has proposed a price of $4.33 per unit for which it wants Government approval. The Rangarajan committee agrees with the formula by which this price has been arrived at.
But wants some changes in the interest of greater transparency. But the CPI-M says this price will deliver windfall profits to Reliance. It cites Reliance’s offer to sell gas to NTPC at $ 2:33 per unit in 2004.
But crude oil prices to which REL has indexed its price have moved up since and the NTPC deal is also under litigation.
Oil and gas exploration is a risky business, the Government attracted private investment on the promise of market pricing.
But by charging Reliance with profiteering, the CPI-M wants to cast itself as the champion of the poor, and score political points against the government.
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