Natural Gas Supply and Pricing thereof

 
People would like to commend Hon’ble Prime Minister’s wisdom in directing that fertilizer sector should be given priority over others for gas linkage and power should be encouraged to relay more on coal for its growth.

Natural gas and pricing thereof has engaged the attention, media space and airtime of the population in large over the past few weeks. Government would have already received representation and advice from all and sundry on the extremely critical issue of gas pricing and further its allocation to different sectors and end users.

People would like to commend Hon’ble Prime Minister’s wisdom in directing that fertilizer sector should be given priority over others for gas linkage and power should be encouraged to relay more on coal for its growth. But, conversely, distressed to read opinions and recommendations from not only corporate lobbies, which is understandable, but even surprisingly from bureaucrats and departments of Government that are using the media for airing their contrarian views to perpetuate their narrow minded and vested self interests. This is conduct unbecoming of Government officers and is a display of indiscipline that seems to abound in coalition politics.

What is alarming even more is the fact that there seems to be a collusive efforts on the part of NTPC and Andhra Pradesh Government to further the interests (profit) of a private sector power company owned by Anil Ambani at the cost of a substantial loss in revenue for the Government of India. This is being done under the garb of generating low cost power for the benefit of the nation when actually more than 50% of the gas from the Krishna-Godavari basin gas fields of Mukesh Ambani have been committed to be given to younger brother Anil Ambani under a phantom and much quoted family agreement between the two brothers. The Andhra Pradesh Government and NTPC have very little stake compared to Anil Ambani and any subsidy that the Government would give to power companies by way subsidized gas (in effect lowering its profits) would in fact be "Government dole" to the private sector company owned by Anil Ambani.

As per media reports, the Government would earn around 40-50 thousand crores over the decade long operations of the gas fields and the Government can very well afford to compensate the public sector power companies and fertilizer companies through a portion of the above earnings. This will ensure that the market price and the direct subsidy to the target entity would be more effective considering the rampant corrupt and inefficient power sector any subsidy put into the system losses half of its volume through theft and losses of the system, may a times which is for the benefit of the promoter to earn revenue through the back door. Instead it seems that NTPC has taken upon itself the task of perpetuating the business interest of Anil Ambani by demanding subsidized gas for the power sector. Even though there is likelihood that NPTC could lose the legal dispute with Mukesh Ambani in which case even NPTC volume would be allocated to Anil Ambani. This is a clear case of collusion of NTPC with Anil Ambani companies and this is highlighted by the fact that the former Chairman of NTPC, C.P Jain, who had taken the issue to court in the first instance has joined as a Director in the Anil Ambani group. Government may wants to get this fact verified and thereafter ask the investigating arms of the Government to examine this nexus.

Alongside it would be prudent to also make public this "Family Agreement" between the Ambani brothers which seems to be harming not only the interests of the investors/shareholders of the company but also the entire nation in terms of the Government earning that could be deployed for social sector.

Now, the Government’s attention is highly anticipated as the representation of the Government and credibility of the Indian legal system is at stake if we do not respect the letters and spirit of the commercial agreement, under which Indian and International companies have been encouraged in to invest thousands of crores of risk capital in this pioneering deep water exploration initiative.

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