QUOTE
RIL says it cannot honour the commitment made in the 2005 family agreement due to Government`s pricing and gas policies.
UNQUOTE
htt p://economictimes. indiatimes.c om/news/news-by-industry/energy/oil-gas/Gas-dispute-RIL-RNRL-oppose-shareholders-plea-in-SC/articleshow/5192864.cms
QUOTE
The Supreme Court Thursday asked Reliance Industries if the gas utilisation policy had indeed been notified by the government and if the same was in the nature of an industrial policy. And the answer was no.
UNQUOTE
htt p://ww w. thaindian. c om/newsportal/business/reliance-industries-admits-gas-policy-was-not-notified-second-lead_100264257.html
QUOTE
The Supreme Court Thursday observed that the country will stand to gain if natural gas from the Krishna-Godavari basin is sold at a lower price, while Reliance Industries alone will benefit if the consideration is higher.
UNQUOTE
htt p://sify. c om/finance/high-gas-price-will-benefit-only-reliance-sc-news-equity-jk3saeehfca. html?tag=Reliance_Industries
QUOTE
Question by Swadesh Chakrabortty CPI-M
Whether the government is considering revision of gas price of Reliance Industries as and when the gas is available from KG Basin. Whether RIL has requested the government to raise the gas price at 4.20 dollars per unit; whether Oil and Natural Gas Corporation is supplying gas at a price of 2.2 dollars / unit.
Answer by Dinsha Patel, minister of state in the ministry of petroleum & natural gas
No, sir. No request has been made to the government by RIL to raise the gas price. Under administered price mechanism, gas is being supplied by ONGC to power and fertiliser sectors at Rs 3,200 / thousand standard cubic metres and to transport sector and Court mandated small consumers at Rs 3,840 / mscm. In the North East, the supply to the mentioned categories of consumers is at Rs 1,920/mscm and Rs 2,304/mscm respectively. At US dollar 1= Rs 45, these prices translate to US dollar 1.792/mmbtu, US dollar 2.15 / mmbtu, US dollar 1.076/mmbtu and US dollar 1.20 / mmbtu, respectively. APM price is not comparable with market determined prices under production sharing contract.
UNQUOTE
htt p://ww w. businessworld. in/bw/2009_07_16_Questions_That_Beg_Answers.html
SO THE CONCLUSION. THE PSC RATE OF 4.2 DOLLARS WILL BE STRUCK DOWN AS BEING AGAINST THE NATION`S INTEREST. THIS WILL PAVE WAY FOR SUPPLY OF GAS TO RNRL AS PER FAMILY MOU.
This is my personal opinion considering the fact that RIL dropped nearly 6 percent and RNRL gained more than 10 percent yesterday.
GOLD FINGER - As per the submission before HSC if gas is sold at US$ 4.2 GOI makes US$ 17.4 bn and RIL makes US$ 12.2 bn ie Rs 85,000 crores and Rs 60,000 crores respectively in THIRTENN YEARS!
If gas is sold at US$ 2.35 to ALL then GOI makes US$ 2.4 bn and RIL makes US$ 5.4 bn.
According to me there is no cause for suo motto action however the profit in either case is so meagre I suppose it makes no difference to me barring the fact that there will be NO inducement to further ramp up production beyond 80 mmscmd leave alone from 60 mmscmd already committed by putting in another 10,000 crores. Best would be to wait it out.
If HSC was to pass an order that gas be sold at US$ 2.34 for how long would HSC pass such an order? Max it can instruct GOI to work out a lower formula.
So what is national interest is somewhere lost on this MMB.
Since there is no PIL to that effect concerning national priority HSC normally cannot pass a general order that gas be sold at US$ 2.34 and that too to RNRL for RESALE.
If the mou is sacrosanct as all division of spoils etc emanate from or form the basis of , the psu is equally sacrosanct as it is govt policy purportedly in the interest of the nation/public good. So the same cannot be brushed aside.
Probing question(s) should not be elevated to the status of possible inference of the way the judgement may go but should be viewed as getting to the core of things.
Let us take the petrol/diesel issue. PSUs are compensated by the govt for subsidising the same by way of oil bonds etc. Are the private sector so compensated? NO. So it would perfectly in order and not malafide to have one set of norms for psus and quite another for pvt sectors, provided they can be justified as being in the public int.
Hence the probing questions and the answers may just put the opposing parties in place as to the impartiality of the HSC in the matter (in view of the high decibel campaign of adag group of partiality of powers that be and by implication the clout big BR may wield indirectly thro such powers on HSC).
I personally believe that supreme court would rule that psc is per see okay but rnrl should be supplied at 2.34 or thereabouts with some modifications as to price, tenure , usage etc in CONSONANCE WITH THE ARMS LENGTH PRICE ESTABLISHED THRO NTPC BY WAY OF GLOBAL TENDER ( whether the contract/tender became legally enforceable or not by subsequent actions notwithstanding) as settling the arms length price at that point of time.
The court may by way of obiter dicta speak about the need for keeping gas prices low for the greater good of the nation ( i had repro an article that said that the lower the gas price the greater is the govt saving by way of subsidy than the profits accruing to govt on higher price of gas).
Ofcourse this is also an opinion and not a conclusion for only a judgement is conclusive or binding and that too when all avenues of it are exhausted. But then too parliament may legislate to overturn it(LOL oiled up)
Also it is important that supply will be to RNRL only after the Dadri power project comes into existence and only to the extent that it can consume the gas.
From 33 mmscmd average to 60 mmscmd from now shows a huge upside possibility in earnings for the next 2-3 years to quickly recover the capex. This is IMMEIATELY visible and after the HSC judgment which may not be conclusive and may require arbitration between the two brothers RIL should move up for sure.
Anyway there is an element of risk and risk takers can NOW enter this stock betting on the outcome.
I have used ... usage... unless the mou specifically permits trading in gas which i dont believe it does for at that point of time that thought may not have entered anyones head as a means of profit. Hence actual usage. Yes somethings may be referred to arbitration.
I am not that concerned about effect or ril price as i am about the principles in this spat which was totally unnecessary.
Not only ril but all fundamentally good stocks are a buy on every dip but fortunes are made NOT FROM FUNDAMENTALLY GOOD STOCKS BUT A LUCKY PICK OF A PROSPECTIVE MULTIBAGGER.... see edserv investors from 20 to 240 in six months and still strong, geodesic 30 to 150 and still strong etc. So concentrate more on identifying such stocks rather than betting on such fundamentally good stocks. The fgs will serve as fixed deposits of share market and not multibaggers which make or break fortunes depending on what u select and how much.
pss5588 - I am starting to accumulate RCOM at 5 stocks per day till I have 300 shares among some other offbeat stocks which I feel will be multi-baggers.
I am not buying anymore RIL even when and if it starts out performing.
Dead Mohankumar bounces back in the market today. Still feel risky to invest as economy still not out of the WOODS. & Bears again opened mouth full of tongue.
sattmarket - Would taste very nice with some garlic sauce and a bottle of wine.
If you meant going short you can buy a PUT option on RIL or simply sell RIL in the future market. Minimum I think is 300 shares but I have not looked into this recently.
Indian Courts are vested with enormous powers to do justice as determined by the judges. There is always the question of morality VERSUS legality and usually the moral aspect wins.
Now another news to substantiate my view that Supreme Court will strike down govt determined gas price.
NEWS ITEM FROM FINANCIAL TIMES
The world faces a natural gas glut that will cool prices, says the International Energy Agency..
Projected global demand points to significant under utilisation of inter-regional pipeline and LNG capacity around the world. This looming glut could have far-reaching effects on gas pricing...
htt p://w ww. ft. c om/cms/s/0/b93be716-c981-11de-a071-00144feabdc0.html
Well RIL can sell gas at .2 but Mukesh should give it to Anil at .34. That is his personal commitment. How he does it is his headache. I am sure he must know of a way out since he has taken the decision of signing the MOU. Whether it benefits RIL, the GOI or some other tom,dick or harry is immaterial since they were not involved in the MOU. Its really an open and shut case. Unfortunately Mukesh has managed to make RIL shareholders a party to it.
It is good that SC Judge has rescued himself so that after SC results it would not be the question that Judge`s family was in close with RIL. So all know the effect now.
Keep Your GOLD FINGER IN YOUR ASS.
forget the article for it deals with the economics and hence possible immediate/immediate future fall out on pricing of gas
and so long as there is no evident or circumstantial case of malafide in the gas price fixation by GOI how can the court strike down the gas price fixed by the govt. THE MAXIMUM IT CAN DO IS RULE THAT IT WILL NOT APPLY TO NTPC(GAS TENDER PROJECT) AND MOU
CERTAINLY NOT A BLANKET STRIKING DOWN. What justification will the HSC come out with for a blanket striking down ESPECIALLY WHEN IT IS FAR BELOW THE COST OF IMPORTED GAS .
NO WAY POSSIBLE.
It goes without saying that this is just my 2 cents worth of opinion.
| NIFTY 
