The Cabinet has allowed Reliance Industries to charge the new gas price for all its fields against a bank guarantee to be encashed if the company is found guilty of hoarding gas, potentially ending a rocky phase in the government’s relationship with India’s richest man, Mukesh Ambani.
The Cabinet Committee on Economic Affairs had approved the new formula five months ago, which would double domestic prices to an estimated $8.4 per unit next April. But the decision was not formally notified. The finance ministry had raised concerns about the ongoing arbitration between Reliance and the government, which has accused the company of deliberately cutting gas production by not drilling the agreed number of wells. “The notification will be issued as soon as we get the minutes of the Cabinet meeting,” Petroleum Secretary Vivek Rae said.
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