Petroleum Minister M Veerappa Moily : RIL bank guarantee issue to be resolved in 15 days

Mumbai – Petroleum Minister M Veerappa Moily today said he is confident of resolving the issue of securing $135 million in bank guarantees from Reliance Industries within a fortnight to enable the company to charge higher gas price from April 1.

“I am confident of settling the bank guarantee issue with Reliance within a fortnight,” Moily told reporters when asked if he would set a timeline for resolving the vexed matter.

According to the ministry, while the proposed bank guarantee would secure the government’s interests on one hand, the higher pricing would protect the interests of RIL on the other.

The bank guarantee is being sought as the government feels that the steep fall in KGD6 gas output is not because of geological reasons, as is being claimed by RIL, but on account of the company’s hoarding gas with to make a windfall gain from next April when gas prices will be doubled.

If the hoarding allegations are true, the bank guarantees would be encashed with interest for the period from April 1 to the date the charges are proved.

Moily met investors, financial institutions and analysts here last night ahead of the forthcoming NELP Round X auctions beginning mid-January.

He said unlike the flurry of negative news regarding the issues between the government and RIL, the only major issue is the arbitration settlement, which is pending with the courts now.

“We have, over the past few months, cleared as many as $7 billion worth investment proposals submitted by RIL,” the minister said, adding that the media was only headlining the negative news.