[1]April 25: The Union oil ministry has or-dered Mr Mukesh Ambani-led Reliance Industries Ltd (RIL) to immediately stop natural gas sales to non-core users like Essar Steel to meet the full demand of fertiliser and power plants. Citing the May 2010 Supreme Court ruling that upheld the government’s right to frame the gas utilisation policy, the ministry last week wrote to RIL directing it to first supply natural gas from its KG-D6 fields to priority sectors like fertiliser and power, official sources said.
RIL is currently producing around 50 million cubic metres a day (mmscmd) of gas from its eastern offshore KG-D6 gas block, just enough to meet contracted demand of priority sectors — urea manufacturing units, power plants, LPG extraction plants and city gas distribution firms. The company, however, had refused to abide by the ministry’s previous order that wanted the fuel to go to sectors like steel, refineries and petrochemical only if there was any gas left after meeting demand of core sectors.
Non-core sponge iron plants, petrochemicals units and oil refineries have cornered 13.13 mmscmd out of the 60.76 mmscmd of KG-D6 gas that the government had allocated in 2008 and 2009. With production dipping to around 50 mmscmd, a worried oil ministry wanted the fuel to first go to core sectors. But RIL has refused to follow the diktat and has continued to follow the July, 2010, policy of pro rata allocation, translating into proportionate cuts in supplies to all consumers. A RIL spokesperson could not be immediately reached for comment.
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