(ET)
The government is weighing options of terminating the production-sharing contract (PSC) or invoking arbitration to penalise Reliance IndustriesNSE 0.58 % (RIL) for selling to itself all the coal bed methane (CBM) it produces, allegedly in violation of policy, sources said. The government has informed RIL of its objection to the gas sale, but the company asserted it had acted transparently and correctly, sources familiar with the development said.
A RIL spokesman told ET that the gas sale had also maximised government benefits because it won the auction by bidding a higher price, which, in turn, increases the state share of profit from the output, apart from increasing tax revenue. “RIL conducted open and transparent bidding process through a reputed independent third party, in compliance with provisions of the CBM contract and policy. RIL emerged as the highest bidder. Supply of CBM gas to RIL, pursuant to the bidding process, maximises benefit to the government.
