(ET)
Reliance Industries (RIL) has prima-facie not complied with one clause of the government’s coal bed methane (CBM) marketing policy because it sold the gas it produced to its own unit after participating in auctions, the oil ministry has found in its preliminary assessment.
RIL said it has abided by CBM pricing policy’s stated objective of discovering the best possible price that maximises state revenue and royalty, which was achieved by its participation in the transparent auctions conducted by CRISIL. Officials say the policy allows sale of CBM to an affiliate only if another buyer is not found but RIL said it acted in line with the policy and has regularly informed the government about its actions.
“The stated objective of the CBM policy is that best possible price is realised, to the benefit of all parties to the CBM contract, without any restrictive commercial practices. Accordingly, RIL has followed fully transparent and competitive open bidding process in line with the CBM pricing policy and provisions of the CBM contract and ensured that the best possible CBM price is realised to the benefit of all parties to the CBM contract,” it said in an emailed response to ET’s queries. It said the CBM price discovered in the auction will also maximize royalty and profit-linked payments to the government under the CBM contract.
