Oil ministry, CAG, SAT make things difficult; firm says always had transparency with govt agencies

In February this year, Aam Admi Party leader Arvind Kejriwal targeted Narendra Modi, accusing him of links with Reliance Industries (RIL) Chairman Mukesh Ambani. Hours later, Bharatiya Janata Party leader Chandan Mitra told a television channel that the party opposed the Rangarajan formula on gas price hikes that Kejriwal alleged was in favour of Ambani.

No one gave much importance to Mitra’s statement because of the perception that relations between RIL and the Central government would improve dramatically once the United Progressive Alliance, with which India’s largest private company had a lot of run-ins, was voted out of power. However, four months later, Mitra has proved to be spot on. There is no evidence to suggest any warmth in the relationship between the new government led by Modi and RIL.

The first of the bad news was the government’s decision to defer the decision on higher gas prices. This is a huge setback for RIL as in April this year, the company had asked the oil ministry to announce the new price immediately after polling ended on May 12, saying this was necessary to avoid “irreparable” loss to all parties, including the government. The new pricing formula arrived at by the UPA government almost doubled the price of natural gas to about $8.34 per million British thermal unit and was to be implemented from April 1. But it was put in abeyance following a directive of the Election Commission.

For more visit: Business Standard

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