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‘Centre allows RIL to make future windfall of 1.2L cr’

Former Delhi CM Arvind Kejriwal has claimed the impact of a gas price hike from April 1 would cost the country a minimum of Rs 54,500 crore every year, and in addition to this, he said, the central government had allowed RIL to make a future windfall profit of Rs 1.2 lakh crore by gold-plating its project.

In a press release, the Delhi government had said that since the term of the UPA government was ending in four months, it should have left the decision to the next government and “this hurry shows a malafide intention of helping” RIL.

It claimed that the decision to hike the gas price from the existing $4.2 (Rs 262.25) per mmbtu (one million British Thermal Unit) to $8.4 (Rs 524.20) per mmbtu would make gas prices in India among the highest in the world.

It also claimed that there was no attempt to determine the cost of production independently and accurately. There was also no explanation as to why when the entire domestic production is to be consumed internally, prices are being fixed in US dollars. The fluctuation in dollar rate will only lead to a further increase in gas prices.

Charging the UPA government with collusion with RIL, the statement said the Centre took no action against RIL for its deliberate drop in production and ignored the CAG report and the then solicitor general’s opinion (in May 2012), and on the contrary, accepted RIL's demand for doubling gas prices from April 1 this year.

The AAP government said that even if the Centre’s argument that new prices would bring in more investment in exploration were to be accepted, there was no justification for raising gas prices from existing fields. “The central government (particularly petroleum ministry), has connived with RIL to help it in making a windfall profit at the cost of the common man,” it said.

Kejriwal claimed that the cost of production of gas was less than $2.34 per mmbtu. “The fact that RIL had signed long term agreements with NTPC and RNRL for supplying gas at that rate for 17 years would show it was making profits at that price. RIL’s partner NIKO has a 25-year contract with the Bangladesh government to supply gas at the rate of $ 2.34/mmbtu,” he said.

“A letter from RIL to the director general hydrocarbons giving its cost calculations shows the cost of production is less than $1 per mmbtu. Then why did it seek a hike in gas prices and why did the central government agree to it?” he asked.

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