"I realise that some of my criticisms may be mistaken; but to refuse to criticize judgements for fear of being mistaken is to abandon criticism altogether... If any of my criticisms are found to be correct, the cause is served; and if any are found to be incorrect the very process of finding out my mistakes must lead to the discovery of the right reasons, or better reasons than I have been able to give, and the cause is served just as well." -Mr. HM Seervai, Preface to the 1st ed., Constitutional Law of India.

Thursday, May 19, 2011

Natural Gas Allocation in India: Latest Development

We have been following the latest developments on the dispute between some steel producers and the Ministry of Petroleum and Natural Gas on the allocation of natural gas. Certain steel companies had filed cases before the Delhi and the Bombay High Courts challenging the direction of the Ministry of Petroleum and Natural Gas to Reliance Industries Limited to sell gas to priority sectors. We had a post describing the entire dispute and it can be accessed from here. On May 11, the Petroleum Ministry had called for a meeting to hear the grievances of the steel producers. In the said meeting, the Ministry had stated that it would take a decision on the issue by May 18.

Business Standard and the Times of India report that the Ministry has stuck to its initial decision to prioritise gas sale from Reliance D6 Field to the priority sectors first and then only to the Non-priority sectors. The reason that the Ministry had given is reportedly that the production from D6 was below expectations and that the interest of the core sector cannot be sacrificed.
It may be noted that news reports state that the Petroleum Ministry and its exploration regulatory arm, the Directorate General of Hydrocarbons had already asked Reliance Industries Limited to drill two wells by June.

The same issue is pending before the Bombay High Court and is coming up for hearing on 23 May. We'll keep our readers updated on the issue.

No comments: