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Reliance to end gas price dispute with government

Reliance Industries Ltd (RIL) will be withdrawing from its ongoing arbitration with the government on pricing of natural gas, a person privy to the discussions between the company and the oil ministry disclosed.Not only will it bring to an end the face-off between the company and the government, it will also enable RIL to avail of the recently approved liberal gas pricing regime.Withdrawing the arbitration relating to price fixation of gas is a pre-condition for availing of the new liberal pricing formula the government approved on 10 March.An oil ministry official, who asked not to be named, said companies have indicated their willingness to go ahead with the field development after dropping the arbitration.That process will be initiated after the Supreme Court reopens on 29 June after the summer break, the first person quoted above said.

“There is considerable push through new policies to free up the sector and to encourage new investors and investments to come in. This is catching investor interest and the appetite seems to be there despite the fall in oil and gas prices over the past year,” said Anish De, partner and head of oil and gas, KPMG in India.Oil minister Dharmendra Pradhan had said that the liberal pricing for gas under the new regime will only go to fields that are unencumbered of any legal case. “Any pending arbitration on pricing aspect has to be either withdrawn or concluded,” he had said in March.