Gas pricing: Kejriwal takes on Ambani
February 12, 2014 - 6:48:07 am
NEW DELHI: Delhi’s new chief minister took his anti-graft campaign to new heights yesterday, ordering an investigation into India’s richest man, Reliance Industries chairman Mukesh Ambani, and policymakers over gas pricing.
Arvind Kejriwal and his Aam Aadmi, or Common Man, Party (AAP) won the Delhi state election in December with promises to fight corruption and to tackle high utility prices.
The investigation being opened is the latest salvo against the tycoon over natural gas produced from the Reliance-operated D6 block on India’s east coast. Kejriwal said Ambani’s company had created an artificial shortage to “blackmail” the government to set higher prices.
“We believe that high prices are being caused by corruption,” Kejriwal told a news conference, speaking in Hindi.
A Reliance spokesman declined to comment on the allegations. Reliance has long maintained geological complexities have pulled production lower. The country’s upstream regulator believes the company failed to drill the number of wells approved in the development plan.
Kejriwal’s attack plays into a heated political atmosphere, with a general election due by May. Leading a party formed just a year earlier, Kejriwal’s victory in Delhi had stunned both the ruling Congress Party and opposition Bharatiya Janata Party (BJP).
The BJP is ahead in opinion polls as the public grows disillusioned with Congress, which leads the ruling coalition, over a series of corruption scandals and a slowing economy. Although it is unlikely to win, AAP could draw votes away from both parties.
Reliance had agreed to supply gas to utility NTPC Ltd at about $2.3 per million British thermal units (mBtu) for about 17 years. But the price of gas from D6 was fixed at $4.2 per mBtu in 2007 when Murli Deora was oil minister, in the Congress-led government.
Last year, after Veerappa Moily took over as oil minister, the federal government decided to move to market-linked pricing, which could double local gas prices from April 1 this year.
“Today we have instructed the anti-corruption branch to file a criminal case against Murli Deora, FIRs (investigations) against Veerappa Moily, V.K. Sibal, the (then) director general of hydrocarbons, Reliance Industries Ltd chairman Mukesh Ambani and others,” Kejriwal told the news conference.
An FIR, or frst information report, is the first stage of an official investigation into a complaint. Kejriwal said he had acted after receiving four complaints. He said he would ask the federal government to suspend any order to raise gas prices until the issue was resolved.
“The wells belong to us. If Reliance and Mukesh are not producing gas in order to create an artificial scarcity, then the government should look at giving these wells to the (state-run exploration company) ONGC and some other entity which can operate them and produce gas,” he said.