SC asks NDA govt to clear its stand on gas price from Krishna-Godavari Basin

The Supreme Court (SC) asked the National Democratic Alliance (NDA) government on Thursday to make its stand clear on fixation of the price of gas from Krishna-Godavari (K-G) Basin.

The SC asked whether the government's stand ticks to the previous United Progressive Alliance dispensation's policy or makes any departure from it. "Tell us what the situation is. Whether you (government) are going to argue or stick to the old government's policy or is it something else?" a Bench headed by Justice T.S. Thakur asked.

A fresh hearing on the issue started because an earlier Bench headed by Justice B.S. Chauhan was not able to adjudicate the dispute as he retired before the hearing concluded. Justices J. Chelameshwar and Kurian Joseph, who were part of earlier Bench, also comprise the new Bench.

Public interest litigations (PILs) filed in 2013 by Communist Party of India MP Gurudas Dasgupta and non-governmental organisation (NGO) Common Cause had challenged the decision to double the price of natural gas from $4.2 per British thermal unit (mmbtu) to $8.4 and sought cancellation of Reliance Industries Limited's (RIL) contract for exploration of oil and gas from the Basin.

Solicitor General Ranjit Kumar told the new Bench that the NDA government has deferred implementing the formula for gas pricing recommended by C Rangarajan Committee till September 30.

Rangarajan was chairman of Economic Advisory Council. Kumar informed the Bench that the government has formed a panel to recommend changes in the pricing policy.

"A committee has already been formed. Till September 30th, nothing is happening. The committee can submit its report by September 30th and only after that a decision will be taken," he said.

The government also said that RIL has invoked arbitration on the issue of gas pricing. Dasgupta and the NGO said that the government should be asked not to further increase the price of gas produced by RIL from KG Basin.

"For every one dollar increase in price of the gas, there will be an extra cost of over Rs 10,000 crore on subsidy given to fertiliser companies," advocate Prashant Bhushan, appearing for Common Cause, said.

The Bench posted the next hearing on November 14 saying, "Two things will have to be seen. One is whether they (NDA government) are going to change the policy or what stand they take. Second is the feasibility of this Bench hearing this case for very long."