Fertiliser industry ambushed

Department of fertilisers is exploring legal options to safeguard the interests of manufacturers
Noor Mohammad Delhi Hardnews
 
The legal wrangling between Ambani brothers over gas supply from the Krishna-Godavari (KG) has left the fertiliser industry jittery. The industry fears that its allocated share of gas from the field could be seriously impacted in case the Supreme Court upheld the Bombay high court's ruling. The matter is scheduled for hearing by the apex court on September 1. Meanwhile, the department of fertilisers (DoF) is exploring legal options to safeguard the interests of fertiliser manufacturers following a plea from the industry body, The Fertiliser Association of India (FAI).
 
The DoF has said that it would side with Mukesh Ambani, the field contractor, in the Supreme Court. Besides, the DoF has also indicated that it can approach the Supreme Court independently in case of an unfavourable verdict.
 
Fertiliser manufacturers remain a worried lot after the Bombay high court ruled that the memorandum of understanding (MoU) signed for the distribution of family assets between Ambani brothers is legally binding.
 
The industry is allocated 15 million metric standard cubic metre per day (mmscmd) gas supply from the D 6 field in the KG basin on a priority basis. Fertiliser manufacturers are already drawing 90 per cent of the allocated gas supply. The industry fears that gas allocation to fertiliser manufacturers could be seriously impacted if the Bombay high court's verdict is upheld.
 
Based on the MoU signed for the distribution of family assets between Ambani brothers, Anil Ambani-controlled Reliance Natural Resources Ltd (RNRL) has claimed its rights over 28 mmscmd gas from the D 6 field for the group company's Dadri power project.
 
The FAI has sought reassurance from the government that its allocated share of natural gas from the field would not be impacted. Following that, the department of fertilisers (DoF) has also got into the act and decided to support the Mukesh Ambani side, the gas field contractor, in the court case. Besides, the DoF has also indicated that it might approach the court independently in case of an unfavourable judgment.
 
Significantly, many naphtha-based fertiliser plants are currently in the process of planning or implementing projects for a switchover to natural gas. If the gas allocation to the fertiliser industry is curtailed, fuel conversion plans of such plants would go haywire.
 
KG basin gas was allocated by an empowered group of ministers (EGoM) set up at the behest of the prime minister's office to resolve pricing issues.