A news item which has been hovering in the last few days.
What is it all about.?
Krishna Godavari (KG) Basin is spread across 50,000 sq km in the Krishna and Godavari river basins near the coast of Andhra Pradesh. The site Dhirubhai-6 (D6) is where Reliance Industries discovered the biggest gas reserves in India. In government records, the 7,645 sq km block is known as KG-DWN-98/1. The KG basin is considered to be the largest natural gas basin in India. And this site was granted to Reliance group, to extract Oil and Natural gas, which would benifit the nation.
Great, so what’s the issue.?
The cost of procurement of each unit (mmBtu – Million British Thermal Unit) is around $1.43. Reliance group made a deal with Government to produce 132 trillion units charging $2.34 per mmBtu (nearly double the amount of procurement) for 17 years.
Here comes the problem.
Despite making a deal for $2.34, Reliance group decided to hike the price. And unfortunately ,Empowered Group of Ministers (EGoM) in 2007 headed by none other than the current President Pranab Mukherjee, who was then the finance minister. EGoM approved a rate hike of $4.2 per mmBtu of gas. Even before a single unit of gas was produced out of the KG basin, this decision was taken. And to our surprise, the company has planned to revise the price around $8.
How does it affect us.?
The government, which buys oil and natural gas at a high price, will eventually levy high taxes on public to fill the gap. And this is why Aravind Kejriwal is protesting/accusing Reliance group.
It is quite obvious that AK might not win against Mukesh Ambani, who is very influential. Unfortunately, media never shows this issue, as nearly 30% of the shares of Network18 group are owned by Reliance group. Needless to say, NDTV is Congress’ mouthpiece.
AK’s move might be an election gimmick for his Lok Sabha debut, yet this man has taken an initiative to question the stalwart.
Source : Times of India, The Hindu and many other websites. Open to discussion/comments ?