This is a clear case of causing unimaginable loss to the government exchequer and selling gas at exorbitant price to the common man.
The fluctuation in dollar rate will only lead to a further increase in the gas prices.
Documents also reveal that the central government ignored letters by several MPs, including CPI(M) Rajya Sabha MP Tapan Sen, who had highlighted that the RIL demand for $ 8.8 billion to be spent on infrastructure at KG-D6 should be rejected was ignored and the RIL was allowed a future windfall revenue of Rs 1.2 lakh crore ($ 20 billion).
Even if the central government's argument that new prices would bring in more investment in exploration, what is the justification of raising gas prices from existing fields ?
The central government (particularly petroleum ministry) has connived with the RIL to help it in making a windfall profit at the cost of common man and taxpayers by having allowed it to charge a new price for gas that it had already undertaken to produce.
The cost of production of gas is much less than $ 2.34 per mmbtu. The fact that this company (RIL) had signed long term agreements with NTPC and RNRL for supplying gas at that rate for 17 years clearly shows it was making profits at that price also. RIL's partner NIKO has a 25 year contract with the Bangladesh government to supply gas at the rate of $ 2.34/mmbtu.
A letter by the RIL to Director General Hydrocarbons (DGH) 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 ?
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